Overseas Property Blog :: guide to international real estate investment

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Archive for the ‘French Property’ Category

Monaco Is STILL Most Expensive Place to Buy a Home

monaco-habour
Credits: Timo via Flickr

$65,600. a few years ago that would have bought you a property where I live. Now, that is the average price of a property in Monaco, per square meter. The figure comes from the latest release of Knight Frank’s global index of luxury property prices. According to the index London is the second most expensive at $56,300, but this is hardly surprising given the advent of One Hyde Park, a block of flats with none priced under a million pounds.

While Paris’ place in fifth is hardly surprising with a per square meter price of $40,500 the fact that it is at the back of 3 French cities in the top 5 is. Both Cap Ferrat and St Tropez are pricier than Paris with average per square meter prices of $54,600 and $40,800 respectively. We also note the huge gap between 3rd and 4th place.

For France to have 3 cities in the top 5 is significant enough but it doesn’t stop there; the French cities of Courchevel and Cannes hold 6th and 7th place in the chart with per square meter averages of $38,800, and $31,900 respectively. The remainder of the top 10 is dominated by Asia, with Japan’s Tokyo in 8th at $28,300, Hong Kong, China in 9th at $27,300 and Singapore in 10th at 27,100. Many will be surprised at the absence of Shanghai in the top 10, but it headlined as the fastest growing city, its per square meter price of $17,700 representing a growth of 21% over last year.

It is easy to look at $17,700 and notice only how it is way lower than Monaco’s $65,600, so much so that we may partially forget that we are talking about prices per square meter here, in which case even $17,700 is an incredible figure to pay.

Of course Monaco is know stranger to such lavish pricing. This is the third year running it has stood at the top of the global luxury pricing table. Monaco’s biggest deal last year was the purchase of La Belle Epoque, a 17,500-square-foot (1,600-square-meter) penthouse, for 240 million euros ($340 million) from Christian and Nick Candy in September. The buyer, whose name wasn’t disclosed, came from the Middle East.

According to Knight Frank the dominance of established European cities is indicative of a long-running trend:
“The real success stories in 2010 confirm the advantages of a global brand and a diversity of demand requirements, like in London, New York and Paris,” said Liam Bailey, Knight Frank’s head of residential research.
“Tried-and-tested markets with security of infrastructure and political and legal stability will outperform in the long run,” he added.

Two Sides of the French Property Coin: Paris Recovery & Oversupply of Gites

The French property market, reported to have trundled through the crisis much better than Spain, the UK, the US and many others is now thought to be 2 years into full recovery according to data. The Global Property Guide index, which is regarded as an accurate index because it measures prices after inflation recorded a 1.58% increase in French property prices in 2009, followed by a 0.33% rise in 2010.apartments-in-paris-france

None too spectacular right? Right, but like so many places, the recovery in France, just like the decline was — is vastly different on a city by city, region by region basis. Equally, the holiday home market is now thought to be in recovery, but again, depending on what segments and locations you look at.

Data from the French National Association of Estate Agents shows that Paris apartment prices (per sqm) grew 9.7% in the year to end the third quarter of last year).

According to the French National Association of Statistics, French property prices grew 13.8% during the period. Growth was equally strong in the suburbs surrounding Paris, with a 12.07% y-o-y growth in Ile de France — the entire Parisian metropolis, an 11.6% growth in the Petite Couronne (Little Ring) and a 9.12% growth in the Grande Couronne (Large Ring). During the same period property prices in France grew by just 0.6% according to the Statistical body.

An article in the Guardian shows the same tale can be told of the French holiday home market, not only in the signs of a fractured recovery, but also in the tale of the depression.

According to the report foreign buyers of French property are typically better off than those buying in Spain, and are buying at the mid-top end of the market. It is little wonder given the reportedly huge problem of oversupply of holiday accommodation at the lower end of the market.

The Guardian quotes a Richard Dale, from his blog (blog.rhf-international.com) about running a Gites rental business in France. Dale who moved to France in 2003 to run an estate agency tells of the massive growth in the number of Gites complexes. “The number of tourists has risen, but nothing like as quick as the amount of accommodation,” says Dale.

Lanisha Butterfield of Holiday Lettings.co.uk explains that in order to achieve good occupancy rates, Gite owners are cutting rents. Tourists can easily find that hiring a cottage for a week in France in high season can be cheaper – even including ferry costs – than a comparable property in Cornwall, said Butterfield.

Graham Downie, who runs Cognac Property in western France talks of buyer’s moving away from the oversupplied Gite market towards higher end properties.

“In the area around Cognac I’ve seen a move away from the seemingly obligatory gîte complex. Most of my searches now are either for family homes in good condition, with views over the vineyards, priced between €250,000 (£217,418) and €400,000 (£347,767), or for townhouses with a small garden or courtyard between €200,000 (£173,883) and €300,000 (£260,825),” says Downie.

Unsurprisingly then the decline and recovery in the holiday home market are both unbalanced in favour of the high end segment. According to the Guardian French property prices have fallen around 10-15% over the past 5 years. New build properties, including Gite complexes fell in price by 20% on average in 2009 alone.

Unsurprisingly the recovery would follow the same logic. Contradicting the National Association of Statistics, the FNAIM says French property prices rose 6% in 2010. However other reports tell of prices in the oversupplied Gite segment still struggling, as are new build properties, and less affluent areas, with price growth in the mid-high end skewing the overall picture.

Photo credits: Ana via Flickr

French Property Prices Stable or Stagnating as Paris Grows?

The French property market is performing well of late, but one can’t help but draw similarities to the UK where prices rose on low rates and supply throughout 2009 and into the first half of 2010, but fell throughout the second half of 2010 after the government abolished an additional cost on selling houses causing supply to increase.

But the biggest similarity comes from the fact that prices are growing rapidly in Paris, and what some call stability in the rest of France was being called stagnation by the UK’s bears in 2009 as London and the south outgrew the rest of the nation.

Villa Leopolda Story Encapsulates how the World Changed Because of the Crunch

villa-leopolda-cotedazure

In a story that perfectly encapsulates the changing fortunes of the world’s wealthiest in the past few years; Russian mogul Mikhail Prokhorov has just lost the 10% deposit he paid towards the purchase of Villa Leopolda, for $525 million from Lily Safra, socialite and widow of banker Edmond Safra.

Prokhorov’s offer was accepted in July 2008. At the time Safra’s camp had said that the villa wasn’t for sale but but Prokhorov’s offer was too rich to ignore. The deposit was paid into escrow the same month by Prokhorov’s holding company, and the sale was due to complete in December 2008.

Unsure as to ‘Where to Invest’ – Follow the Big Players

Property mogul Eyal Fishman has revealed his insights about global property markets that are influencing investment decisions at his private company Mirland.

Fishman’s companies – including London based Mirland – have property interests around the world.

So what are Fishman’s thoughts about the property world that may hold interest for smaller investors?

Brad Pitt Busy With New Family Home In France – Chateau Mirval

brad-pitt-ange-jolie-french=chateau1

In one of our celebrity round ups earlier this year we talked about Brad Pitt and wife Angelina Jolie’s new French chateau estate in the South of France. The £35 million chateau in the French Riviera features 35-bedrooms and is set to be the new home of the Pitts to raise their plethora of children.

Turn Every Dollar You Invest Into $1.20…Instantly

In today’s investment markets, a sure thing is hard to come by. In 10 years of investing in and scouting non-U.S. real estate markets, I’ve discovered something that comes close just once. And the phone call I had with a contact in Paris convinced me that this strategy remains the closest you’ll get to a sure thing in the international real estate investing game.

Villa Leopolda’s Saga Continues

Villa Leopolda on the South Coast of France in Cap Ferrat was once hailed as the most expensive property in the world. Fast forward a little over one year and the price tag of this once former glorified real estate has not only plunged, but dive-bombed right down to near nothing – compared to the previous price tag of $750 million.

City of Paris Makeover By Nicolas Sarkozy

Roland-CastroGreen-Paris

The French president has ambitious plans for the “city of love and romance”. His vision embraces a greener Paris, a city with improved transport facilities, a new metropolis that is able to compete with other grand cities such as New York and London.

Most Expensive Home Villa Leopolda Still On The Market

Mikhail Prokhorov, Russia’s richest man had to pull out on the much reported deal to purchase  Villa Leopolda, a $750 million estate in Côte d’Azur, the South of France after seeing a good portion of his amassed fortune lost in the current global recession.

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