Yes, I’ve just returned from two months in Paris and honestly, if I had my druthers, I’d move in a heartbeat. I loved the small winding streets, the Arcs, the tiny fromageries and boulangeries, the pain cereal and baquette ancienne, the gardens, the palaces, Dior, Chanel, sidewalk cafes and the gorgeous 18th and 19th century stone apartment buildings with balconies, large windows and fabulous views of Parisian rooftops.
As well as taking French classes four days a week, I also did my research on Parisian real estate and spent time with Kathryn Brown of Paris Property Finders, a boutique real estate firm that specializes in helping Parisians and non-Parisians purchase apartments in Paris. Kathryn herself is from the States and moved to Paris because she fell in love with the city. We had lunch together at Les Temps des Cerises (The Time of Cherries: the name of song written in France in 1866), a small traditional bistro in the quartier Marais. Over lunch we talked about buying in Paris and Kathryn told me that her buyers must have at least 800,000 euros or more to spend and preferably 1.2M euros.
Real Estate in Paris is expensive and while the U.S. and other parts of the world see values dropping, Paris continues to see prices go up. Ile-de-France, the core of the city surrounded by the banlieu /suburbs, is a relatively small area made up of 1,051 square miles but densely populated with 2.193 million residents. According to an article on Time Magazine’s website in December 2010, Christian Lefebvre, president of the Paris Chamber of Notaries said “Paris is above all a classic example of a glaring shortage of supply in the face of roaring demand,” meaning there aren’t enough properties for the number of people who are looking for housing. This is good news for owners and would-be investors as the rise in French prices isn’t due to bad mortgages or speculative buying and will unlikely be effected by the global economic downturn.
Although there are a few houses dotted across Paris, the great majority of people buy or rent apartments in buildings. An old city code still prohibits construction of buildings higher then 37 meters, therefore the apartments tend to be four to five floors that give the city an intimate and manageable feel. Apartments come in all sizes – studios, one bedrooms, two bedrooms and, if you have well over $1M euros to spend, penthouse apartments with roof top gardens.
Kathryn told me her agents are often in bidding wars for good properties so competition is alive and well in the Parisian housing marketing. As for financing, a buyer must have a minimum of 20% to use as a down payment and it is not unusual for banks to ask for 30% down. Like here in the States, there are a variety of loans available including standard fixed rate loans, variable rates and interest only. Interest rates for French mortgages start as low as 2.5% for variable loans and go as high as 4.10% for standard fixed rate loans. If you are an American buying in France, you will need to to show a passport, proof of income, proof of residence, three months of bank statements, and an explanation of all other debt. If you are interested in buying a Parisian apartment and don’t intend to live there full time, there is a thriving rental market for tourists and residents. While searching for my own rental, I found monthly rental rates from 1000 euros (for a tiny tiny studio) to 15,000 euros or more a month for a two to three bedroom apartment in a great location. That can add up to serious rental income to supplement a monthly French mortgage.
And if you don’t have an extra 1M euros hanging around, there is another way to buy in Paris that is gaining in popularity. Known as Fractional Ownership, you are basically buying a share of time in a property. If you are looking for a pied-a-terre or nice vacation home and don’t expect to spend more than a few months in Paris a year, buying into a property with other owners might be the answer for you. Right now for 60,000 euros (approximately $87,000 US), you can buy through Paris Property Finders a one bedroom, one bath apartment in the Latin quarter in Paris (5th arrondissement). To rent a lovely apartment for one month in Paris in the 5th, you are likely to pay around $2500 per week or $10,000 for the month. Therefore, it would only take eight years worth of wonderful Parisian vacations to make your Fractional investment pay off.
I returned home feeling optimistic about the opportunities for Americans wishing to buy in Paris. I learned a tremendous amount about the city itself and have some insider info as to where to buy, for how much and what you can get in each quartier. If you have any interest, please don’t hesitate to get in touch to discuss a possible purchase. I’ve got excellent real estate contacts in Paris and beyond and will keep on top of the market. Whether it be a full-on purchase or fractional ownership, the Parisian market appears to be going up and staying up. So if you’re interested, give me a call to talk Paris and properties, two subjects I will never grow tired of discussing!