Luxury Apartments in Paris Selling Strong to French and International Buyers
Real estate prices and foreign investment in residential Paris property both looked stagnant at the start of 2016. But recent figures show otherwise, as both French and international investors contribute significantly to a revived luxury market.
Sales figures from the last quarter tell a story of a vibrant, active sales market in luxury property in Paris. Serious sellers have revised their listing prices downward since reaching unprecedented highs in 2015, and buyers have been there to benefit. French buyers, once hesitant about investments at 5 million euros or more, represented 40% of the buyers in the 1st quarter 2016.
The remaining 60% of purchases were made by foreign investors. A notable number of properties were scooped up by Swiss, Turkish, Libyan and United Arab Emiratis. Paris is only too keen to attract investors from these regions, with this week seeing major conferences and expositions aimed at attracting Moroccan and Kuwaiti investment. The latter is already worth a few billion in Paris alone.
South Koreans are also eyeing up the capital as a target for property investment. Wealthy buyers from the country could plow as much as 1.5 billion Euros into the property market before the end of the year. This is according to Francois Blin, head of international investment at Lasalle Investment.
A recent editorial on the French website SeLoger asserts that the next few months will see the return of other wealthy investors to French property, from Brazil and east Asia. Last week saw a series of conferences in Paris aimed at further facilitating Chinese investment.
Several factors have contributed to this trend. It’s now a year and a half since Hollande’s government dropped the 75% wealth tax. Many saw this measure as anti-business, and France saw an exodus of residents and businesses after its 2012 enactment. The gloomy situation as we moved into 2016 was also in part due to a turbulent 2015 for France. This year has been significantly more stable for the country, domestically.
But more importantly, the Brexit vote in the UK has heightened interest in Paris as an alternative investment target. It recently became the European city with the best economic growth potential, according to a report published by Lasalle. Record-low interest rates are also helping to spur borrowing and investment, contributing to a wider improvement in the French property market this year. Foreign investment is part and parcel of this recovery.
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