To invest in Paris is like buying a piece of art

Published in Unique Estates Life Magazine Spring 2024.

In 2024, France is on track to maintain its leading position as the world's most popular and attractive destination, with Paris preparing to welcome nearly 15 million visitors just during the summer. The capital will host the XXXIII Summer Olympic Games from July 26 to August 11.

Besides being the epicenter of sports this year, Paris is also establishing itself as a hot spot in the real estate market, especially in the eyes of international clients. The French capital has everything needed to attract wealthy buyers – quality, meticulously preserved historical architecture, and magnificent views of the Eiffel Tower, complemented by numerous lifestyle advantages – art, fashion, and gastronomy. According to industry experts, investing in luxury real estate in Paris is appealing to affluent clients and has an emotional aspect similar to the feeling when purchasing a work of art. Added to this is the undeniable financial security in France. As a pillar of the European economy, the country is much less exposed to sudden market changes than Anglo-Saxon or Northern European countries. As a result, foreign buyers, especially from the USA, China, Taiwan, and the Middle East, have been massively returning to the French real estate market since 2022. Carefully preserved, it attracts foreign clientele seeking trophy apartments or pied-à-terre. According to data from Junot Fine Properties | Knight Frank, a leading agency specializing in luxury real estate sales and part of the international Luxury Portfolio International network, Paris remains a favored place for foreigners, and their presence is significant. Every sixth high-end segment buyer in 2023 using Junot Fine Properties | Knight Frank services for certain types of properties and neighborhoods is a foreigner. Preferred by these clients are the central and prestigious 6th, 7th, 8th, and 16th arrondissements. Fans of the 8th arrondissement and its "golden triangle," Chinese clients view Paris as a financial product. They already own properties in London and New York, and Paris is becoming a strategic place to complete their refined collection. These Asian buyers particularly like richly decorated, typically Parisian apartments over 250 sq.m., ideally with a view of the Eiffel Tower. More curious and eager to discover the Parisian art of living, the Taiwanese also have very high budgets and invest more on the left bank of the Seine.

An interesting detail is that true luxury is the presence of a view, terrace, or garden, which drastically increases the selling price of luxury properties in Paris. For a premium apartment with a view, the price increases by an average of 27%, and for properties with outdoor spaces or a beautiful balcony, clients pay about 59% more compared to a similar property without these extras.

According to Junot Fine Properties | Knight Frank, the market behavior in 2024 will be characterized by more reason and discernment – buyers are becoming more demanding, seeking turnkey properties and reducing the price if there are major defects. Sellers, on the other hand, are showing greater realism, making transactions smoother and reinforcing the trend towards a two-speed market. Luxury properties maintain their high prices in neighborhoods and areas considered elite and secure, especially in western Paris, where family apartments are becoming rare and the most sought-after. Located on high floors, renovated, with modern interiors, with elevators, in well-maintained buildings, and close to good schools, this type of property sells quickly without a price discount. Such an attractive apartment with an exceptional view in the western districts sold in 2023 within 24 to 48 hours at an average price of €20,500/sq.m. The variable credit conditions in France have little impact on demand and the number of transactions in the luxury segment due to the shortage, quality of the offered properties, and the relative immunity of buyers to these financing problems. 75% of Junot Fine Properties | Knight Frank sales in the last quarter of 2023 were made through self-financed payments, without the need for credit. In the rental market, fully furnished homes remain preferred by clients due to the tax benefits they generate. However, the approach of the Olympic Games intensifies the phenomenon of rental shortages, especially in central Paris and the inner suburbs. On one hand, there is the withdrawal of landlords due to declining rental income, and on the other, French legislation obliging them to undertake costly energy renovations. Junot Fine Properties | Knight Frank expects that in the fall of 2024, the rental property shortage will slow down, potentially leading to a drop in prices with increasing supply benefiting rental candidates.

Every sixth high-end segment buyer in 2023 is a foreigner. Preferred by these clients are the central and prestigious 6th, 7th, 8th, and 16th arrondissements.