Sliding $$$

I have a contact in LA who is forever posing questions about what is happening in the property market here in Paris. He has a project to buy but he's not in any hurry so we have some interesting back and forth by email:

"Is the sliding dollar cooling american interest in Paris properties -- or, conversely, making it more imperative to buy as a hedge against further declines?"

Here's my reply:

"It's less of a sellers market here now and even good properties are going less quickly. Americans are significant buyers in Paris but there are also other groups so although the $ sliding has been significant it hasn't been felt strongly yet. I have noticed a shift in clientele for Bonapart with lots of Irish and UK purchasers where the economy (Ireland) and the currency (UK) is strong whereas it was at one time almost exclusively US citoyens.

The wobbly dollar has certainly affected rents of medium to long term rental - and also the short term market, mainly the crappy agencies and mom and pop operations with bad home made web pages (of which there are legion), as far as I know the people who do a good job and have nice apartments are still raking it in!

The currency situation vis a vis buying? I think in parts of Paris such as the Marais and the 6th for certain prices have topped out but they are holding steady and will continue to do so. It's safe to say wait until Spring (when good property will be back on the market) and see what happens, you might find you can get a bit more for your money.

The talk in France, at least online, is incessant about la bulle immobilière (property bubble) and Le Krach, not here so much but what's happening abroad in places such as Australia and the affect of the US on the French property market. According to the National Association of Home Builders it's a great time to buy a home, seemingly in contradiction to the endless stream of negative press about how housing is crashing.

Contrary to what some pundits here say it's really not going to carry on as it has done over the last 7 years forever and the market has calmed over the last 18 months. As for this idiotic hype I couldn't possibly join in, even if my business is about helping foreigners buy homes.

But hang on, we'll always have Paris right? And it's a great place to buy because of it's unique qualities, it's history, the fact that the Périphérique (ring road) tightly contains our 20 arrond. (too tightly some say) and it's protected to the nth degree in terms of further building and alterations to existing structures. It's a little like living in a museum at times (which can be annoying too when one yearns for the energy of a city in movement such as Berlin, despite all the ugly cranes).

People will always want to come here (currently Paris is the most visited city in the world), a little different to Montenegro or wherever the vapid Property Overseas magazines say it's currently vital to invest. Like you are really going to get a bargain after they've finally got it on their front cover. Doh.

Comments

[Doug Stewart (French Property Specialist)]

I agree absolutely with this post, Although I don't have much to do with Paris itself, I see the same trends reflected in France generally.

According to FNAIM:
- House prices in the last seven years (since begining of 2000) have almost exactly doubled.
- The year to date (November, 2006) has been 7.3%, which is slower than it has been in earlier years.
- The last 3 months in particular has seen price increases being very moderate.

It is of course difficult to predict the future. However, price increases have slowed a lot and I personally believe this will continue.

In terms of foreign buyers, the English and Americans still have a strong presence. However, in recent years the boom in the Irish economy has resulted in them becoming important buyers in France. The Dutch, Germans and Italians are also substantial.

In recent years, due to a slowdown in the Swiss economy, there are fewer Swiss buyers (and a number of sellers). However, this is mainly noticed in the east of France.

In terms of buying in France generally or Paris specifically, I believe that there are still good values to be had, but they are harder to find than before. So a house finder can be a good investment.

Keep in mind that fees (estate agent, taxes, notaire) associated with buying/selling property in France are substantial, so one should look for a property to be a medium to long term investment, not something one buys and then sells a year later.

[Gideon]

I recently bought an apartment in Paris and I'd go along with most of what you said but I'd add that wherever you are buy something that you like and you can afford and you'll be happy there regardless of the whims of the marketplace.