Champagne Tastes on a Beer Budget

If you read yesterday’s Parler Paris Nouvellettre®, then you know that I’m writing from Epernay, a town in the Champagne region, while taping our 37th House Hunters International episode.

Yesterday the “contributors” and the crew went up in Epernay’s signature hot air balloon while I watched from the ground as it lifted off, then a few minutes later from the window of my hotel room. Sadly, you’ll have to wait untill the show airs to see the views they saw from the sky of the vineyards and countryside that surround the Champagne town.

This week we have visited three rental properties — as is the formula of the show, to visit three properties. In this case, two are in town and one is in the countryside. Their budget of $2,000 a month for rent gets them a lot more property in Epernay than it does in Paris. But of course, these are two very different French cities, offering very different kinds of lifestyles. The contributors set their sights on this part of France where very few North Americans land to take up residence. Their eight year-old daughter said she is the only Anglophone in her school, but because of it, as they speak virtually no English, and after a short time in France, she is already fairly fluent in French.

As I pointed out to Dave and Christine, their time in France for their daughter is a gift they are giving her to learn a new language and experience a different culture. I’ve warned them that when their year comes to an end, they may not wish to leave and better be prepared for not only staying a lifetime, but buying a property instead of renting.

Buying in the Champagne-Ardenne, the department in which Epernay sits, is as much a bargain for buying as renting. According to Meilleurs Agents (which draws its statistical date from the INSEE), the average price per square meter for a home in the regions is 1,234€, from 926€ to 1,852€.

Let’s compare the four departments of Champagne-Ardenne for purchasing or renting, on the average (up to March 2019):

Paris is easily up to ten times these property prices: an apartment averages 9,463€ and a house averages 10,145€.

Foreign buyers make up a small amount of the property market in France. In 2017, 5.4% of resale housing transactions were made in the metropolitan territory by buyers of foreign nationality, according to a recent study by French notaries. The trend in the first half of 2018 showed a slight increase in their share (5.9%), but that’s mainly due to transactions in Île-de-France — not in the provinces such as Champagne. Non-resident foreigners, those who have their “pieds-à-terre” for occasional usage, represented only 1.6% of purchasers of resale housing in 2017 (0.7% in Île-de-France and 1.8% in the provinces).

These proportions are similar for the first half of 2018. The share of British among non-resident foreigners fell sharply between 2016 (33%) and 2017 (26%), a period notably marked by the referendum on the membership of the United Kingdom to the European Union (Brexit). For the last 10 years, however, they have been the most important foreign nationality among non-resident buyers. On the other hand, the Germans, who occupied the eleventh position in 2007 (3% of non-resident foreigners), gained one place each year, surpassing in 2017 the Italians, who have been in the top three since 2007.

Buying behaviors vary greatly depending on the nationality of the buyers. For example, over the period 2007-2017: 75% of Scandinavians did not live in France at the time of the transaction, compared to half of the Italians and only 6% of Spaniards or Portuguese. Among non-resident buyers, Italians bought almost exclusively apartments (92%), including a large proportion of studios. Ninety percent of their purchases were made in urban areas. Conversely, the Dutch in particular, but also the British and Belgians, buy more houses (mostly six rooms and more) and half of their purchases are made in rural areas.

For more information, download the PDF (in French) here. 

Special observation: A study by the Chambre de Notaires of Greater Paris provided a comparison of the evolution of housing prices in three international cities: Paris, London and New York. If Paris and London were disconnected from the prices of their country, unlike New York, Paris had seen the greatest increases in seeing its prices (in euros) multiplied by 3.9 in 19 years against 3.6 compared to London and 2.1 in New York. In the three metropolises, there is also a strong dispersion between the values of the different neighborhoods, but much less so in Paris, concentrated on a much smaller area.

The bottom line: France is a better investment, particularly Paris where price increases have been extraordinary and will continue to rise, according to the predicted trends.

A bientôt,

Adrian Leeds
Adrian Leeds Group

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