Wealthy French fleeing tax hikes are offset by foreign investors buying luxury properties in Paris
President Hollande’s proposed income and wealth tax changes have caused at least some wealthy French residents to start looking for greener pastures with less burdensome taxes.
The Paris real estate market was quiet in the 1st quarter, with 30% fewer sales than the same period in 2011. But, following the French presidential election, the sale of luxury properties has started to pick up, as wealthy French property owners look to reinvest in countries like Belgium, Switzerland and Great Britain.
This growing selection of high-end properties has created good investment opportunities for French and foreign investors, particularly in Paris. The surfeit of real estate has caused some softening in prices, but the market for quality properties has held strong. Retail and commercial properties continue to attract large investors in Paris, evidence at least of their confidence in the city’s real estate values. Most prominently, Norway’s Sovereign Wealth Fund recently purchased €275 million worth of property, while the Qatar government, which owns Harrod’s in London and the luxury brand Valentino, is placing its bets on the 2013 opening of a 200-room Peninsula Hotel in the 16th arrondissement, and has just scooped up a prime complex on the Champs Elysees.