The high life in Paris

Paris is getting bigger – taller to be precise – and luxury properties are also in demand. So where is good to invest now and in the future?

Like all cities around the world, Paris is undergoing change as it adjusts to the new economic climate – however, the skyline of the French capital is literally set to change in the coming years.

In 1977, Jacques Chirac, then mayor of Paris, banned high-rise buildings and towers were not allowed to be more than 37m high. City officials have now decided to reverse this decision, and for the first time the iconic Eiffel Tower will compete with new skyscrapers for dominance of the horizon.

For instance, construction is expected to start this year on Project Triangle, one of up to 20 skyscrapers planned for the city, and is due for completion in 2012. The 200m-tall, 50-storey structure will be located at Porte de Versailles, and when opened will be the third-largest building in Paris, after the Eiffel and Montparnasse towers. This new Parisian icon was designed by Herzog & de Meuron, the same Swiss architecture firm behind the Bird’s Nest stadium that played a starring role in last year’s Beijing Olympics.

The tower will be pyramidal to make sure it doesn’t cast any shadows on nearby buildings. And one side will be an ultra-thin triangle resembling a shark’s fin, hence the name! It will include offices, a conference centre, a 400-room hotel, restaurants, cafés and gardens. It has also been designed to optimise solar and wind power generation.

However, the traditionally stubborn Paris residents are not all happy, and a recent survey found that 62% are opposed to skyscrapers being allowed in the city. Yet Paris’s notorious shortage of rental accommodation has meant that the height restrictions may simply not be feasible anymore, and the city will either have to expand outwards or upwards!

Paris’s style is also set to change as it moves to reflect the new fashion of a new age. Stuart Baldock, head of Property Vision France, says: “There is a clearly defined micro-market for luxury assets in the best arrondissements of the French capital. For years, many Parisian apartments had a ‘shabby chic’ or ‘faded elegance’ that most buyers accepted as normal and typically French. However, there has been a realisation that international buyers are looking for the highest quality that can be routinely found in London or New York.

“When compared with London, Paris looks very good value, and as a consequence we continue to witness ongoing demand which is maintaining values.” Baldock’s colleague James Geddes adds that the appeal of Paris is that the market has remained stable for the last few years, so is not as volatile as other locations, and “top-end properties are between 40%–50% cheaper than London”.

Recent distressed times have also seen the emergence of what are known as “bottom feeders”. These are cash buyers who want to invest while there are good opportunities to buy at lower values.

“Although some seem to regard bottom feeders as a sort of unpleasant parasite, they do actually underpin a fragile market and serve to restore confidence. They also remind everyone that there are opportunities in a slowing market,” says Baldock.

There has always been a shortage of accommodation in Paris, and demand for rental properties remains high. Website Holidaylettings.co.uk found that their properties in Paris generate two-and-a-half times the site average for booking inquiries. Some 72% of its properties available for rental are small one-bedroom apartments or studios; the average rental rate is £500 (€573) a week in January and up to £570 (€654) a week in July, August and December. “The relatively flat pricing structure reflects the year-round demand for accommodation experienced by homeowners,” says a spokesperson for the site.

“Paris has traditionally enjoyed a stable residential property market, with annual growth of around 10% for the last 10 years,” says Marie-Pierre Saint-Martin of the London Paris Dream Home agency. She reports that the Chambre des Notaires de Paris, which publishes the official figures for the sales in the city, calculated that the growth for the first half of 2008 was 9.4%. While prices are predicted to grow by about 5%, John Crawley of the Oui Can Do agency reports that the market has slowed down considerably.

The French capital was given a ringing endorsement by the International Law Partnership in its tips for 2009, when it awarded Paris the top spot for investment this year.

John Howell, a senior partner at the firm, says: “Paris was voted for several years the best risk-adjusted investment location in the PricewaterhouseCoopers Urban Land Institute Survey. Additionally, it is the most visited city in the world and is very well placed to suffer less from the current recession than most other cities.” However, he did warn that “in Paris, location is everything and the performance of an investment will vary from street to street”.

He advised that people looking for a buy-to-let Paris property should be looking in the third and fourth arrondissements, where there is heavy rental demand and prices lower than in the more expensive areas. Paris is a changing city, but those who decide to invest in it may also see their fortunes change for the better.

FACTS & FIGURES
AREA: 2,723km²
POPULATION: 9,644,507
CURRENCY: Euro
HOUSE PRICES: Prices in France are stagnant and while Paris sales are down some are expecting prices to rise; but no more than about 5%.
RENTAL YIELDS: 4%–5% rental yields are about the average.
AGENTS: Contacting FNAIM (www.fnaim.fr) is a good start, or its members can be recognised by the yellow cube logo. Alternatively, try the many agents abroad that focus on the French market.
BUYING TIPS: A notaire is always required, however it is a good idea to shop around because their fees can vary considerably. It is also worth getting the property surveyed because sellers are not obliged to report any faults.
TAXES: France has a double taxation agreement with most countries. Rental income is taxed from 25%, capital gains tax is 16% and the property tax is usually paid by the person living in the property.
AVERAGE PRICES: Prices start from about €190,000 for a small 20m2 apartment, but prices vary among areas and lower figures may be possible in the present market.

Take five Paris Pads
Clichy-la-Garenne, Nanterre
PRICE: From €172,265
DETAILS: A leaseback development of 103 one- and two-bedroom apartments with underground parking, providing a yield of up to 4.8% and located in west Paris in the 17th arrondissement.
OUI Can Do, Tel: +353 (0)12 110 106, www.ouicando.com

House near Beauvais
PRICE: From €570,000
DETAILS: A four-bedroom summer home 30 minutes from Beauvais airport and Paris city centre. It comes with a double living room, wooden floors, courtyard and basement.
Parism2, Tel: +33 688 418 931, www.parism2.com

16th-century château
PRICE: From €3.25 million
DETAILS: One hour from the centre of Paris, this huge property comes with 12ha of land, outhouses, three levels, wooden fireplaces and stone staircases. There are also professional equestrian facilities.
Demeures de France, Tel: +33 (0)14 417 9540, www.demeures.com

La Défense, Esplanade
PRICE: From €260,000
DETAILS: Located in a major business centre, these 86 refurbished studio, one- and two-bedroom apartments offer a 4% guaranteed rental return.
Erna Low, Tel: +44 (0)207 590 1624, www.ernalowproperty.co.uk

Apartment in Marais
PRICE: From €120,000 per 12th share
DETAILS: Two-bedroom property in an historic area offering fractional ownership with four weeks annual usage. It also has a 10m2 private terrace.
Paris Property Finders, Tel: +44 (0)207 669 0108, www.parispropertyfinders.com, www.fractionalparis.com

Been there done that
PARISIAN PASSION
An artistic area of the French capital proved a sound rental investment for one inspired buyer

Although she describes herself as “middle-aged”, divorcee Lindsay Maxwell has always had a love of the finer things in life, and it was always her dream to live in Paris. The French capital has attracted and inspired romantics throughout history, and for Lindsay it was no different.

While the initial romance that motivated the move did not work out, Lindsay is still besotted with her new Parisian home. “Paris is so exciting, there is always something to do and there is such a depth of culture – art, cinemas, museums. For me, it is the centre of European art and such a stimulating and beautiful place,” she says.

Lindsay still spends the majority of her time in her primary residence in London, where she works in the construction sector as a project manager. However, when her son goes to college she plans to eventually make Paris her main home.

Located in the central 14th arrondissement, Lindsay’s one-bedroom apartment is just 10 minutes from Montparnasse Cemetery and the tombs of Jean-Paul Sartre, Samuel Beckett and Serge Gainsbourg. She bought the property in 2006, and now rents it out when she is not there. Many of the guests who come to stay are often professionals in the academic and artistic arenas, as the area is quite artistic in nature.

The renting experience has worked out well, and Lindsay has had 50% occupancy in the first year. She also says she has made lots of new friends after staying in contact with some of her guests.

The apartment cost €250,000 and while Lindsay found the buying process straightforward she does warn that in France there are strict laws and it’s difficult to backtrack. “You can’t make an offer and pull out at the last minute. You pay a deposit and once you pay it you are committed, and if you withdraw you lose your deposit plus 10% of the purchase value,” she warns.

So how has her Parisian dream turned out? “It is not how I imagined,” she says smiling, “but better.” And to prove the point she reports that she has just invested in a second property.
For More Details on Lindsay’s Apartment, Visit www.holidaylettings.co.uk/41474

Tips & debate
FIRST IMPRESSIONS
Want to attract more buyers and get more money for your home? Shane McGinley finds out what you can do to spruce up your abode

People often buy homes based on emotions, and interior designer Sinead Considine says that it is generally accepted that most buyers decide whether to submit an offer within the first 30 seconds of viewing.

In 2004, Sinead set up a business called Upstage, which gives homes a professional makeover ready for them to be sold. Since then, difficulties in the property market at home and overseas have meant more people than ever are looking for tips on how best to sell their homes.

Raya Mamarbachi, director of real estate website Simplyzigzag.com offers some simple tips. The first thing is to declutter and make sure drawers and wardrobes are not bursting at the seams. Make sure all counters are clean and free of old magazines and coffee cups, have scented candles lit if you smoke, and have something nice cooking in the kitchen. Do any repainting needed, check light bulbs work and give the feeling of space and light by opening blinds and removing excess furniture.

For seven years, Pam and Dave Bates have run a thriving B&B business in Italy, but have now decided to sell up and go travelling. Pam, who has given advice on overseas living and property for TV shows such as Channel 4’s A Place in Italy and BBC’s Put Your Money Where Your Mouth Is, has a few tips for those looking to sell their property abroad.

She recommends that sellers put out some photos to give the place a homely feel, and ensure the house is spotlessly clean, including changing sheets in the bedrooms. She also suggests arranging some flowers in the kitchen and setting the table; placing colourful potted plants on the doorstep; and getting rid of any evidence of pets, ashtrays or bins.

“Be realistic about the price, check prices of similar properties in the local market and offer a creative payment plan if necessary,” she says.

If it’s a business property you are selling, a B&B for example, have some previous figures ready of takings from the past year, and realistic forecasts and a business plan for the coming years. Give your chosen agent all the promotional material you can and get professional photos taken.

Pam’s B&B is located in Le Marche near Italy’s Adriatic coastline. She is hoping to get €850,000 for the business and is offering staged payments and six months’ marketing and PR consultancy in the deal.
www.villasibillini.com / www.upstage.ie