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Parisian property investment cools

17th October 2005 | back to article listings BACK    print this article PRINT

The Parisian property investment market, for much of the last few years the subject of giddy speculation and rocketing demand, is following the trend of much of western Europe and beginning to cool say French estate agents.

Following much the same course as similar property investment sectors in London and southern Spain, demand remains consistent and prices high but the edge has been taken off the rush to market. Apartments once snapped up for asking price on the same day they hit the market are taking a little longer to leave the shop window.

"For the past five years, clients would come, look at one apartment and make a bid," Ludovic Guespereau, director of upscale Rue du Faubourg St.-Honore based estate agents C.B.G Immo told the International Herald Tribune, adding that since mid June and July this has changed.

"Clients are seeing five apartments, and then they wait and take time to make up their minds," Guespereau said. "They think it over."

The French, often baffled outsiders to the overseas property investment boom taking place in their own country, have also twigged on the money making opportunities of small property investment transactions.

While the French stock market has underperformed, they have switched their sights to holidaymakers, spurred by tax breaks provided for buy to let owners. This is particularly true at the top and most lucrative end of the market, says Adrian Leeds, publisher of French Property Insider.

"Ninety percent of our clients say, 'I want to buy a sweet little pied-a -terre I can stay in four weeks a year and rent out 80 percent of the time,"' he said, adding that this end of the market was becoming glutted.

While trendier, more youthful and affordable areas such as the 10th Arrondissement around the Canal St Martin rose in value by 18.8 per cent between April and June, prices in the exclusive parts of town are static or even slipping.

Figures released by the Chambre des Notaires de Paris, who collate property investment paperwork, showed that although prices of flats in the Fifth Arrondissement were up 4.6 per cent for the year ending June 30, they were four per cent down on the quarter.

Which can only be good news for those seeking buy to let rental income rather than quick turn over investment, as prices deflate to sensible levels. "Toward the end of last year we were almost embarrassed to say 8,000 to 8,500 euros per square meter for a good apartment," said estate agent Mitch Rose of Groupe Mobilis on the Left Bank.

"Now we quote 9,000 to 10,000 euros, and it is sometimes not quality. People think they can get top dollar for a mediocre apartment. The fact is, they can't."


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