Is Paris an Expensive Choice? Not According to the Numbers
French Property Insider Volume XVIII, Issue 3 Thursday, January 16, 2020 • Paris, France
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Bonjour French Property Insider Subscriber,
Paris gets a bad reputation as one of the world's most expensive cities in which to live and they are wrong, wrong, wrong.
According to Numbeo, a semi-annual publication (January and July), the most expensive city at the beginning of 2020 was Zurich, Switzerland. Other cities in Switzerland get spots number 2 through 5 of the most expensive cities in Numbeo's list: Basel, Lausanne, Geneva, Bern. Three cities in Norway are on the spots number 6 through 8: Stavanger, Oslo, Trondheim. New York is ranked 11th, while San Francisco is 12th, out of 440 cities in the world. Tokyo, ranked globally 18th and is the most expensive city in Asia. Cities in Africa are all in the bottom half of the list, with the most expensive ranked city being Pretoria in South Africa on the number 252 spot.
So, where's Paris in this list? Twenty-Fourth with an index of 85.16 compared to New York's 100. That's a far cry from being one of the most expensive. Just when comparing rents, San Francisco tops the list with an index of 115.58, New York is next with 100 and Paris is in 34th place with 46.98. Surprised? The lowest rents are in India, but I bet you hadn't considered living there in place of Paris.
If you compare Paris property prices and rents with New York City, you get an interesting picture:
Price to Income Ratio:
Mortgage as Percentage of Income:
Loan Affordability Index:
Price to Rent Ratio - City Centre:
Price to Rent Ratio - Outside of Centre:
Gross Rental Yield (City Centre):
Gross Rental Yield (Outside of Centre):
Rent Per Month
Apartment (1 bedroom) in City Centre
Apartment (1 bedroom) Outside of Centre
Apartment (3 bedrooms) in City Centre
Apartment (3 bedrooms) Outside of Centre
Buy Apartment Price
Price per Square Meter to Buy: City Centre
Price per Square Meter to Buy: Outside Centre
Salaries And Financing
Average Monthly Net Salary (After Tax)
Mortgage Interest Rate in Percentages (%), Yearly, for 20 Years Fixed-Rate
What do the statistics tell us?
Property in Paris costs a homebuyer about twice as much of their income as a New Yorker's. Or, New Yorkers earn double that of a Parisian, depending on how you want to look at it. Their rents are more than double the cost, too, but the cost of the property is pretty close to being the same, while the cost of the mortgage in Paris is less than one half of what it is in New York. Confused?
Don't be fooled by the statistics! What's not here is the cost of ownership — much higher in New York than in Paris thanks to low property taxes in France and other low carrying costs, such as utilities and homeowner association fees.
There is also the question of the size of the property — an average one-bedroom in Paris is smaller than an average one-bedroom in New York. 6sqft.com claims that "On average, New Yorkers can claim 1,010 square feet per person (this figure refers to all spaces citywide and not to the average space one enjoys in their own home). To put this figure into perspective, in Manilla, Paris, and Tokyo, residents have access to much less space (as little as 250 square feet per person in Manilla). On the other hand, if you pack up and move west to Los Angeles, you will have access to about three times the space you currently have in New York. Indeed, L.A. residents enjoy a staggering 3,660 square feet per person."
And then there's appreciation to consider. If you ask Bloomberg.com, "Miami and Paris are looking good, but NYC and Vancouver are still in a slump."
Paris is in the lead for 2020 with a 7% luxury price increase. While Miami is looking good right now, it's not a city in which I'd invest, as the future is too unpredictable with climate change, increased risk of hurricanes, etc. Other factors may affect the future of the cities that are currently looking strong.
New York is still a buyer's market and prices are predicted to fall another 3 percent this year. Buyers are sitting tight to see how the presidential election plays out. Demand is down because of what Bloomberg attributes to "onerous rent regulations and an increased mansion tax, which leaves buyers of luxury property with higher closing costs."
The bottom line question is this: Where do you want to invest? You can invest your money in something that makes you money, or you can invest in something that enriches your life, or you can invest in something that accomplished both.
P.S. Be sure to read all about Tuesday's Après Midi where Kim Bingham and Pierre Thunus spoke about getting a mortgage and securing the loan with life insurance. See photos and read the details on this session's web page.
Property Relocation Services: Long Term Rental Apartments
Long-term rental apartments” are any furnished or unfurnished apartments available for rent from 1 month to 3 years. Apartments in Paris of this kind are difficult to find and even more difficult to secure – even for the locals.
We can assist you in finding apartments in Paris, Nice, or elsewhere in France, based on your preferences, budget, and needs. Our rental professional will ask you to complete a questionnaire to determine your specific desires, consult with you, perform an apartment search and selection, provide photos and descriptions or set up personal visits—plus, assist you to negotiate the lease on your behalf.
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