Air dates: Thursday, August 29 10:30 p.m. ET Friday, August 30 1:30 a.m. ET
Following in her mother's footsteps, a college graduate has fallen in love with the rich history and art in Paris. Now, both mom and daughter are on the hunt for a small piece of the city they can call their own and fulfill both their dreams of calling Paris home.
How Brexit will affect the French property market is on everyone's mind, not just the Brits or the French, but all of us. Prices in Paris continue to rise as lending rates stay low and there seems to be no end in sight. If you believe the reported statistics, property prices rose 24 to 29 percent in the last four years, on a per square meter basis.
Paris is unique in France as the demand exceeds the supply. The reasons for the lack of stock has to do with a variety of factors which include the zoning laws that won't allow growth upward (hi-rises) except in certain parts of the city, the city boundaries that limit geographic growth, the rental laws that make property return on investment more difficult and less interesting than in the past, the outlook on futuristic potential (such as the 2024 Olympics) and let's face it, Paris itself — the world's premier tourist destination.
Meanwhile, the French have moved to the U.K. and the Brits have moved to France, each seeking what the other has that they do not. The Brits, fearful of the outcome of Brexit, are banking on French property investment to hedge their bets against what could be a massive economic crisis in the U.K. President Emmanuel Macron was no idiot when he reduced property taxes on the wealthy to encourage even more foreign property investors in France at this moment in time considering what's happening on the other side of the Channel.
Property is selling quickly in Paris with such a limited supply and all areas of the city are benefitting. This means even less expensive areas are gaining ground, increasing in value even more than the already chic districts. And as long as interest rates remain as low as two percent or less (which is almost like "free money") then sales will continue to grow and prices will continue to rise.
Brexit has created fear among the French who live in the U.K. because they worry if they will be able to continue living and working there. The uncertainty of citizenship and visa requirements drives a need to secure a foothold in their native country (or elsewhere in Europe), which will come to light should the U.K. put forth a hard Brexit as of the end of this October.
he sterling dipped to a 10-year low against the euro and dollar this month, now worth €1.08 and $1.21. That's pretty scary as the Brits' buying power diminishes with each political move toward Brexit. No wonder they see France as a good alternative. Plus, anyone can purchase real estate in France. As the price of the property increases, the notarial taxes and fees actually decrease, too, approximately 7 to 7.5 percent of the price of the property. Mortgages are easier to get for the British than they are for Americans (thanks to FATCA) and meanwhile, their U.K. holdings are losing value so they are running to cut their losses, contributing even further to the downturn of the sterling. Investing in a real asset is safer in this economic uncertainty than the stock market, further fueling the demand.
What does all this mean? It means that investment in Paris property is a pretty safe bet and one shouldn't wait too long before taking the leap to property ownership.
P.S. If you are considering a property purchase in France, don't do it lightly. Let us help you make the smartest decisions to ensure you make the best investment you can. Contact us at [email protected] to learn more.
P.P.S. If you are considering transferring currency, do it with one of our recommended partners to save about two percent on the commissions and fees! See our currency exchange page for more information.
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