It seems we just can’t get enough of gaie Paris. Despite what travellers say about the French and despite the prices, France remains the single most visited country in the world with 80 million visitor arrivals in 2011 — up 3 percent — way ahead of second place United States and third place China; Paris is the most visited city in the world, besting London, New York, Venice and our darling Hong Kong according to the UN’s World Tourism Organization and the Paris Convention and Visitors Bureau.
The French are often credited with the old adage about “Working to live, not living to work,” and it’s a phrase Hongkongers would do well to heed on occasion. And true or false it’s also the spiritual foundation for a distinctive place — romantic, iconic, inspiring — that people have wanted to be for thousands of years. “Paris offers a unique lifestyle. Often regarded as the cultural capital of the world it also retains its pre-eminent crown as the most hotly visited city in the world,” reiterates Mark Harvey at Knight Frank’s French desk. That attitude trickles down to the city’s residential property market. For 2012 and perhaps beyond, the city’s “Relative political and economic stability will ensure Paris remains a compelling alternative to London.”
Paris has a booming economy despite the malaise that seems most common in the media. The city’s GDP is among the highest in Europe and it accounts for a substantial portion of France’s. It’s also one of the most diverse economies, where no single industry dominates. Similarly, no single district dominates the landscape for offices and so finding the Parisian equivalent of Canary Wharf or Mid-town Manhattan (where the best rental returns are found) is almost impossible. However, it does provide flexibility for investors as well as a certain joie de vivre.
France’s new socialist government led by Francois Hollande spouts the kind of policy that makes investors nervous (meaning tax hikes) and the never-ending Eurozone brouhaha — which France is caught up in as one of Europe’s most robust economies — is enough to cause market fits, but Jones Lang LaSalle’s Pulse for April noted that the investment sector in Paris was surprisingly stable. “Despite concerns about the financial and economic situation, activity levels in 2011 were high with revised figures of €5.745 billion for Q4 and a total of close to €12 billion in the Greater Paris Region in 2011, thanks in particular to the end of article 210-E tax breaks … Investment levels for the first quarter of 2012 amounted to €1.34 billion, which was exactly the same as in the first quarter of 2011,” the report stated. In addition JLL went on to point out that, “The increasingly international composition of the market was confirmed during the quarter (implemented or signed transactions). The defensive aspect of the Paris market attracts new arrivals and confirms the interest shown by historic operators.” So a little turbulence nearby isn’t scaring institutional investors away.
But does Paris have a residential investment market, as buyers in Hong Kong know it? “Paris does have an investment market although it is much smaller than London,” states Harvey. “Off-plan options in Paris are very limited and only account for a few hundred sales a year compared to many thousands in London.” Those with a taste for historical buildings or the suburbs might find the landscape to their liking. Similar to London, however, prime locations remain rare. “Nouvelle Vague located in the 4th arrondissement represents a rare opportunity to acquire a Seine frontage on the right bank,” Harvey notes. And as an alternative to London it shares many of that city’s strengths (with better coffee) and options for getting across the channel are myriad.
Though embroiled in Europe’s debt crisis, like Berlin the city has fortunately stayed largely outside the situation’s realm of influence. “Paris prices remain stable although we have seen a fall in demand and a net increase in supply since the first quarter of 2012,” Harvey allows. That, however, isn’t an indicator of mass panic and cheap product flooding the market in the near future. “There are no fire sales in Paris and we are unlikely to see any such opportunities unless the economic situation deteriorates rapidly,” he states. “Among many international buyers Paris still represents a safe haven to park money.” Safe — and really good place to live a little.