Paris remains attractive to foreign home buyers, thanks to its natural charm, rich history, and culture. The city is also known to provide strict guidelines for intellectualism and food with abundant gastronomic offerings. While Paris performance has somewhat declined during the global financial crisis, it remained fundamentally strong.
Experts believe that the inherent strength of the French capital will continue to drive luxury properties in some of its most coveted locations.
If you’re a foreigner and planning to invest in Luxury real estate Paris, two things you might want to know:
- Your most likely competitors or neighbors. Demand mainly comes from foreign buyers. Italians used to be the biggest buyers until recently when Chinese investors topped the list during the first three months of 2019. They are particularly active in some of the most expensive areas of the French capital, including the 6th, 7th, and 8th arrondissements. American and British buyers who have been particularly interested in Luxury real estate Paris in the Left Bank closely followed. Other new buyers come from Brazil and India.
- The budget to prepare. Foreign buyers usually invest in centrally located small apartments with a budget range between €1 and €1.5 million. Cash-rich investors from economically or politically unstable countries like Eurozone (Greece and Italy) and the Middle East tend to have bigger budgets of over €2 million.
Before looking for properties, you need to:
- Think long-term. Consider your personal and financial status, plans like passing the property on to your children, the financing requirement, the amount of money to reserve for personal use, and the amount of rental time to allow. Depending on the area, long-term rental yields vary. You can earn as much as 5-6% return. The Mairie or the town hall of every area regulate short-term rentals.
- Evaluate the financing options available. Some properties have a mortgage of up to 75-80% loan-to-value. Find out if there is any wealth tax you need to settle.
- Know what you really need. Decide on the property size and the price you are willing to pay. You can narrow down your options by giving more information about the must-have elements you wish for your property to your agent.
While searching for the property, you need to:
- Spend time to look around the areas that interest you. Check out the attractions, shops, and restaurants nearby. Talk to neighbors or better yet, visit the Mairie. The 6th and 7th arrondissements are the most sought after locations, especially if you want to experience the genuine Parisian culture, St Germain des Près. The 3rd and 4th arrondissements in the Marais area are another popular location.
- Check out if some parts are requiring further work or if there are any other major expenses. Inquire about maintenance fees and annual Tax Fonciere.
- If you’re planning to profit from the property via resale or rental, consider properties with a garden view, or near landmarks. Property prices in Paris are stable as a whole with demand exceeding supply. It may range from €10,000 – €20 000 per square meter (psm). Prices are higher when it is found at a location that is sought after or with a substantial wow factor.
- Discard parking facilities as search criteria as a car is not practically needed in Paris.
- Look for a functional floor plan. Do not be too preoccupied about square meters. A 50 m2 apartment with a great layout makes a better choice than an 80 m2 property with a long unusable corridor.
