- Paris housing market still afloat despite COVID’s strict lockdowns plunging country into recession
- Report by Notaries of Greater Paris in mid-December pegged Paris sales volume decrease at -13% and +6.6% price increase compared to last year
- Sales of luxury properties in 2020 rose some +5%, according to lux agency Daniel Feau Group
After two strict COVID-related lockdowns in metro Paris (“strict” translates into being unable to leave your residence 23 of 24 hours a day and then only with timed and dated permission slips), buyers are wanting to buy and the definition of desirable housing has been expanded to include areas outside the city that have homes with gardens and terraces.
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“Blue chip” arrondisments (districts/neighborhoods) in central and western Paris (1,2,4,5,7,8,16) have always been and continue to remain in demand, according to Alexander Kraft, chair and chief executive of Sotheby’s International Realty France. The region west of the city where homes with open, outdoor spaces are plentiful is seeing a “renaissance,” according to Kraft. Additionally, in conjunction with the now-happening expansion of the Paris metro in preparation for Paris hosting the summer 2024 Olympics, easy commuting options to and fro in outlying areas are attracting buyers.
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Kathryn Brown, director of operations with the luxury agency Paris Property Group,” said, “So you can live outside of Paris and have a house and a yard. And the price per square meter is like half of what it is inside Paris.”
Less expensive (just under $1M) and smaller properties in Paris are selling “immediately and at full price” while higher-priced, larger properties, usually acquired by wealthy foreign buyers, “…have become more negotiable,” according to Brown.
Kraft said, “Normally, foreign buyers represent at least 50% of our clientele…” but during lockdowns, the share of foreign buyers dropped to just 7%. However, Pierre-Alain Conil, partner with the Paris notary firm Morel d’Arleux, said, “I know that some (foreign buyers) are still considering it for when the pandemic will be over because of how strong the market has proved to be, which makes it a very safe and conservative investment.”
There are no restrictions for foreigners to buy real estate in France, according to Conil. By law, real estate transactions are handled by notaries. Foreigners can obtain mortgages for approximately 60 – 70% of the purchase price. Americans who borrow from French banks have the ability to deduct the loan amount from the property value for wealth-tax purposes. Plus, real estate financing loans are always covered by death insurance.
Closing costs for existing resale properties range between 7 – 7.5% of the purchase price and include a stamp tax, purchase taxes and notary’s fees; closing costs for newly constructed properties go up to 3% of the purchase price. The agent’s commission, though paid by the seller, is included in the sales price of the new/resale property.
Thanks to The New York Times International Edition.
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