From the City by the Bay
Volume III, Issue 41
I’m writing you from an altitude of almost 11,000 meters, headed toward the City by the Bay (San Francisco) where a group of people interested in learning how to live and invest in France will be attending our conference for three very informative days.
Presentations will be made by some of the finest professionals the U.S. and Europe have to offer on a variety of important topics: How to obtain the right to be in France, how to earn a living in France and start a business, how to buy and own property in France, how to profit from the leaseback program, corporate housing in paris (chip) and other investment property programs, how to find your dream apartment in Paris or home in the country, how to get a mortgage, how to minimize your tax and maximize the benefits, how to renovate your French property, how to reduce your currency exchange risk, how to learn the language, how to cross the cultural divide plus how to rent your French property for profit. This final one is the one presentation I make, now that we are in the process of starting our own full-service rental agency to represent our clients’ apartments and those of our colleagues.
In today’s FPI, you will be getting the same valuable information as our conference attendees. Scroll down for “Renting Your French Property for Profit” — a written version of the presentation I will be making.
This weekend and next Wednesday in New York at the Invest in France Seminar, I will take the opportunity to learn from these professionals valuable tidbits regarding property purchasing and ownership so that next week’s FPI will report on these findings. For those of you in the New York vicinity, the seminar still has seats — so we welcome last minute registrations. See https://adrianleeds.com/wp-content/uploads/newsletters/parlerparis/liveinfrance for more information.
Also in today’s FPI, note what’s on the upcoming auction block — a great way to land a big bargain in Paris, and an article published in a recent International Herald Tribune by Sharon Reier titled “Is the real estate boom cooling.” Reier interviewed both Yolanda Robins and me early last week. While some of the agencies are reporting changes in the market, we at FPI have seen little to convince us that the market is cooling off. Our most recent clients have secured properties at asking price to very close to it — and within days of the property entering the market. The article is reprinted in this edition, but to read it online, visit http://www.iht.com/articles/2005/10/14/yourmoney/mreal.php
You can also read Yolanda Robins’ analysis of the latest real estate figures in “Paris Property Remains Undervalued.” She mentions that the greatest price increase over the previous quarter was found in the 19th Arrondissement, and we’ve listed a few property picks from this up and coming neighbourhood. Plus, there is good news from the Paris Tourism office, with a number of transportation improvements in the works, designed to make it even easier to travel around the City of Light.
A bientôt…from San Francisco
Editor, French Property Insider
Email: [email protected]
P.S. As a special thank you to our readers, we are EXTENDING the discount of $150 off every seminar registration to all subscribers of Parler Paris, French Property Insider and clients of John Howell & Co. on the upcoming Invest in France Seminar.
Invest in France Seminar
October 26 , 2005
Harvard Club, New York City
Volume III, Issue 41, October 20, 2005
Volume III, Issue 41, October 20, 2005
In this issue:
* Tips for Renting Your Paris Apartment
* Real Estate Market in Paris and Around the Globe
* The Latest Paris Property Figures
* Paris Tourism on the Rise
* Expatica “Welcome to France” Fair Wrap-up
* Paris Transportation Improvements
* Share Your Paris…and Get Published!
* Register Now for Upcoming Conferences
* Complete Relocation Solutions from FPI
* Today’s Currency Update from Moneycorp
* Next Parler Paris Après-Midi: November 8
* Hot Properties: Up and Coming in the 19th
* On the Auction Block November 8
* Classified Advertising: Leeds Marais Apartment Available Thanksgiving
* Classified Advertising: Apartment for Rent, Paris 6th
Renting Your French Property for Profit
By Adrian Leeds
Overview of the Rental Market
Let’s take a look at Paris as a market for short term rentals. It’s the number one most visited city in the world. Approximately 25 million visited Paris in 2004 and of those that had overnight stays in hotels, about 3.5 million were North Americans, 3 million British, 1 million Australian/New Zealanders — all Anglophones to which an Anglophone owner could easily promote. The biggest spenders on accommodations are the Japanese (100 Euros/night), then followed by the Chinese (81 Euros/night), the British (78 Euros/night) and lastly Americans (77 Euros/night). This indicates that the Anglophones are seeking a good value. More and more, tourists are choosing apartment rental options rather than hotels.
We believe this is because of cost effectiveness (often apartments are comparable or less expensive than hotel accommodations), convenience (kitchen facilities) and a sense of belonging (the feeling of being at home in Paris).
Why Buy in Paris?
Because tourism is virtually all year long in Paris, with the exception of August and January, higher occupancy rates are ensured. Most owners can experience occupancy rates of 50% to 80% with certainty. While the property is generating rental revenues, its value is increasing steadily, as high as 18.8% in some districts. And let’s not forget, Paris will always be Paris, the most visited city
in the world.
Types of Apartments that Rent Best
Currently, the market has an overabundance of small apartments — studios and one bedrooms. Larger apartments are therefore harder to find and more in demand — two bedrooms or more, that sleep four or more. Charming apartments in older buildings are most requested, but often the older buildings don’t have elevators — another plus for rental success, especially if the apartment is higher than two flights. Since the “canicule” (heat wave) two years ago, apartments with air conditioning are at a premium. If the apartment affords fabulous views or a terrace for outdoor dining, it will win favor over others. High Speed Internet, WiFi and Cable TV are a must, at this day and age, particularly for business travelers and handicapped access is another plus to put your apartment above the rest. If your apartment is noisy, it will deter return renters. Double-paned windows can help insulate apartments on well-trafficked streets, but look for apartments on courtyards or at least with their bedrooms on the quietest side.
How to Price Your Rental
First of all, there is truth to the old adage: “location, location, location.” Renters want to be in central Paris, close to museums, shopping and tourist attractions. Apartments in prime locations can command a higher price.
Size and the number of people an apartment can sleep dictates the price you can charge, too. Studio apartments that sleep two, normally rent from 525 Euros/week to 1000 Euros/ week; one-bedrooms that sleep four, will rent from 700 Euros/week to 1500 Euros/week; two-bedroom apartments that sleep six rent for 1000 Euros/week to 2000 Euros/week and of course, even larger apartments with three bedrooms or more can easily rent for much more.
Short-term rentals of one to four weeks can be priced higher than long-term rentals of one month to one year. Apartments furnished well, luxuriously, will easily command higher rental prices and encourage repeat guests.
The laws surrounding unfurnished apartments favor the tenants, while those applied to furnished apartments favor the owners. Furnished apartments rent for more than unfurnished apartments, although the difference is narrowing in recent months because there are so few unfurnished apartments on the market — their prices getting higher with demand.
Hotels are the number one competition, particularly those in the same districts with the same standards, but they charge 30% to 50% more for a much smaller space. Bed and Breakfasts are new to Paris, supported by a new program to set standards launched recently by the City of Paris.
Where to Buy to Ensure a Profitable Rental
These are the most requested districts in Paris:
1. Ile St-Louis (4th)
2. St-Germain-des-Prés (6th)
3. Le Marais (3rd and 4th)
4. Latin Quarter (5th)
5. Eiffel Tower (7th-15th)
Apartments outside of these areas risk lower occupancy rates.
Other Location Factors to Increase Occupancy
Here’s a checklist for the most rentable property:
* Good Métro and transportation access
* Spectacular views
* Walking distance to major attractions or amenities
* No higher than 2nd floor (European) without an elevator
* Quiet street or courtyard
Furnishing for Luxury
If you want quality tenants at the highest rental rates, furnish your apartment with luxurious appointments:
* High quality mattresses, sofa beds and linens
* High quality furniture and antiques
* Twin beds that convert to king size bed wherever possible
* Modern kitchen and baths
* Washer/Dryer, well-equipped kitchen
* High speed Internet/WiFi, Cable TV, Stereo, VCR
* Other amenities
Expenses to Consider
Don’t forget that you will not be able to pocket all your rental revenues. There are a few expenses you will incur:
* Marketing fees: advertising — as much or as little as you deem necessary
* Management fees: agency or other — ranging from 10% t 40%
* Taxes: Taxe d’habitation and Taxe Foncière — normally very reasonable, known in advance upon purchase of the property
* Utilities: Phone, Gas/Electricity, High Speed Internet — estimated at 75 Euros/month to 200 Euros/month
* Homeowners association fees — variable, dependent on the property
Marketing Your Property
The best ways to market your rental property include targeting your audience in print advertising, via the Internet, through choosing the proper rental agency and telling your friends:
* Targeted audiences, print advertising: France Today, Gourmet, New Yorker, Alumni magazines and others
* Internet: Your own Web site, classifieds and other sites (VRBO.com, CraigsList.com, Franglo.com, etc.)
* Your rental agency
* Word-of-mouth, friends
One word of advice: reply quickly to your rental requests — the first to
respond usually appeals to potential clients.
Finding a Good Rental Agency
There is a fairly methodical method to determining which rental agency will work best for you and your apartment. Use the Internet — search it to determine which agencies result highest in the search engines. These agencies are likely getting most of the requests. Then, think about what kind of agency will work best for you:
* Advertising only (NYHabitat.com, VRBO.com)
* Boutique firm, French or US owned
* Large firm, French or US owned
And determine what services you will require:
* Reservations only
* Reservations with meet/greet
* Complete services including bill paying and maintenance of the property
How Rental Agencies Charge for Their Services
Agencies all work a little differently from one another.
Most operate on a commission basis, taking from 10% to 40% of the rental depending on the level of service they provide. They may also ask you for a lease — renting the property at a fixed rental and then the agency sublets it to short-term guests at whatever rate they want to fill it. Or on a fixed rate basis, the agency and owner determines a guaranteed fixed rate per night, then the agency charges whatever the market will bear and takes the risk of the margin. The extra expenses, such as housekeeping may be charged separately to the owner or included in the commission.
Reporting Your Rental Income
The French government expects owners to report rental income and applicable expenses on a French tax return. Many agencies are set up to take reservations via a U.S. or foreign entity, for U.S. or foreign clients, and many owners take advantage of reporting their profits on their U.S. or foreign tax returns. We recommend that your tax advisor assist you for the best and most legal method of reporting.
Once you have a clear picture of the kind of agency that will satisfy your needs, interview them, ask for references and interview the references. With dozens to choose from in Paris, you are sure to find at least one that will provide the profitable rental apartment you hope for.
Editor’s Note: Parler Paris will soon be offering apartment rental reservations, booking services, Web site advertising and other representation services. For more information, contact Yolanda Robins at [email protected]
Is the Real Estate Boom Cooling Off?
International Herald Tribune
Photo by Allison Gorlin
Paris: The stampede is over
From his office on the fashionable Rue du Faubourg St.-Honoré, Ludovic Guespereau, the owner of C.B.G. Immo, a real estate agency, said he thought that the buying stampede of the past several years was over.
“For the past five years, clients would come, look at one apartment and make a bid,” said Guespereau, describing a market so hot that clients, sensing others on their heels, felt pressured to bid. Since mid-June or July, that has changed. “Clients are seeing five apartments, and then they wait and take time to make up their minds,” Guespereau said. “They think it over.”
Similar dynamics are emerging in other Paris neighborhoods where wealthy foreigners are a significant presence. That foreign dimension gives Paris property a special edge: as one of the world’s most popular destinations, the city has attracted investors who buy and fix up apartments to rent to tourists on a short-term basis.
“Ninety percent of our clients say, ‘I want to buy a sweet little pied-à-terre I can stay in four weeks a year and rent out 80 percent of the time,”‘ said Adrian Leeds, who publishes The French Property Insider, a newsletter for English-speaking expatriates.
The French, too, have been snapping up small investment properties as an alternative to the stock market, spurred by tax breaks for landlords who rent out furnished apartments. As a result, Mitch Rose, a real estate agent at Groupe Mobilis on the Left Bank, said there was now a glut in small furnished rentals.
So despite mortgage rates in the 3.6 percent range, and huge demand in a city where regulations choke new building, prices are stagnating in top neighborhoods. Statistics published this month by the Chambre des Notaires de Paris – the organization of officials who handle the paperwork on property transactions – show the average price of apartments in the Fifth Arrondissement was up 4.6 percent for the year that ended on June 30, but fell more than 4 percent during the three months from April through June.
By contrast, prices in the trendy and more affordable 10th Arrondissement, around the Canal St. Martin, rose 18.8 percent.
At the top end there is a tug of war between sellers in denial and cautious buyers. “Toward the end of last year we were almost embarrassed to say 8,000 to 8,500 per square meter for a good apartment,” Rose said. “Now we quote 9,000 to 10,000, and it is sometimes not quality. People think they can get top dollar for a mediocre apartment. The fact is, they can’t.”
Geof Lewis, a retired high-technology executive who has property in San Francisco, has been looking for an apartment in the Sixth for two months. “I made a low bid, although it was not accepted,” he said, adding that he remained optimistic: “The market is softening.” – Sharon Reier
Hong Kong: Bucking the trends
Hong Kong has a real estate market that has zigged as most of the rest of the world has zagged. Residential real estate prices fell by two-thirds from 1997, when Britain handed over the territory to China, until the end of the SARS epidemic in 2003.
The question now is whether real estate worries elsewhere, and rising interest rates in Hong Kong, will bring a sudden halt to the local market’s spectacular rebound in the past two years. The rebound has seen some apartments nearly triple in value, approaching valuations last seen at the top of the real estate bubble in 1997.
Speculation that the Hong Kong dollar might be revalued along with China’s currency produced heavy investment in Hong Kong real estate and other assets during 2004 and through most of the
first half of this year. Local banks were awash in deposits and eager to find borrow
ers, so they kept mortgage rates low even though the Hong Kong dollar is pegged to the U.S. dollar, which usually keeps Hong Kong and American interest rates closely linked.
All of this changed on May 18, when the Hong Kong Monetary Authority changed the currency peg in a way that made it much more costly to bet on currency appreciation, and ruled out any appreciation no matter what China did. Speculative money flowed out of the territory’s banking system, and interest rates have risen close to U.S. levels since then, discouraging real estate buyers.
Prices stopped rising and were flat in the third quarter, said Kenneth Tsang, the head of research for southern China, Hong Kong, Macao and Taiwan at Jones Lang LaSalle, the property consulting and brokerage company. Many sellers kept quoting higher prices while buyers were leery of paying them, resulting in a steep drop in the number of transactions.
But Tsang and other analysts continue to predict that prices will rise further in the next 12 months because Hong Kong’s economy is booming along with China’s, and the supply of new apartments is limited.
Tsang predicted that mass market and luxury apartment prices would rise 5 percent to 10 percent by next autumn. John Saunders, the head of regional property research at CLSA, a unit of Crédit Agricole of France, forecast that mass market apartment prices would climb by 8 percent to 10 percent, while luxury apartment prices would appreciate 10 percent to 12 percent.
Few apartment buildings were started in the past few years because of low prices, so only 20,000 apartments are expected to come on the market annually for the next four years in a market where annual growth in demand has averaged 40,000 apartments over the past 15 years, Saunders said. “We still have a market that is woefully undersupplied,” he said. – Keith Bradsher
Ireland: The boom’s delayed effect
When it comes to housing, Ireland may finally be adjusting to the economic boom of the 1990s, which transformed a grim country with persistent unemployment into a thriving European hub in less than a decade.
Instead of emigrating, young couples stayed in Ireland, earned generous incomes and demanded a fresh supply of residential property for the first time in living memory.
House prices soared at an annual rate that peaked, in 1998, at nearly 30 percent. That left home buyers facing an average sticker price of more than 265,000, or $319,000, but the bubble still has not burst. House prices rose 6.2 percent in the year through August, and several factors persuade economists that the market will remain buoyant.
In the next two years, Irish citizens who participated in a one-time government-sponsored savings plan will receive an average of 13,800 each.
That will lift demand by 16,000 new homes, according to a projection by Austin Hughes, chief economist with Irish Intercontinental Bank, which has a mortgage loan book of 8 billion.
And while few immigrants, who are an increasingly essential part of the Irish work force, are buying homes now, they will begin to do so over the next decade as families and ethnic communities settle and integrate.
This year, builders are expected to match 2004’s total of 77,000 new homes – which, in a country of four million, means 19 houses for every 1,000 people, Hughes pointed out, compared with three houses per 1,000 in Britain.
There is also a political imperative to keep churning out, and selling, new houses. Revenue from stamp duty, the national tax on property transactions, is likely to exceed the Treasury’s own forecasts by almost 30 percent, or 600 million, this year. “The government is doing very well out of it,” Hughes said. – Brian Lavery
Japan: A race for high yields
Real estate prices are far from peaking in Japan, where the market is only beginning to crawl out of its slump of a decade and a half. Land prices in central Tokyo have edged up 0.4 percent so far this year, according to a government survey announced in late September. Nationally, though, land prices generally are still on a downward trend. Residential land prices fell 3.8 percent, while commercial real estate dropped 5 percent.
But such price statistics mask a significant market trend, according to Daisuke Fukushima, a real estate analyst for Nomura Securities in Tokyo. He said that developers, real estate funds and institutional buyers were aggressively picking up land and properties that are regarded as useful and that produce ample yields, like office buildings and apartment houses in central Tokyo near major train stations.
“This year, prices are up 50 percent and as much as 80 percent” from a year earlier for such hotly pursued properties, he said.
Driven by investment flows from banks, individuals and foreign investors, real estate funds are racing to buy up properties that pay yields of 4 percent to 5 percent, an attractive return compared with government bonds, which are yielding 1.5 percent.
The competition to buy high-value real estate is fierce, Fukushima said, and investors’ money is now flowing into quality properties in regional centers like Nagoya, Osaka and Fukuoka. Analysts including Fukushima said Japanese real estate was going through an extreme phase of polarization, in which productive property rises in value while less attractive properties lose value. – Miki Tanikawa
London: A gentle landing?
Dire predictions of property crashes have become as common in London as Indian restaurants in recent years. But with every worrisome property forecast has come another bump in prices – so much so that housing costs have soared 165 percent over the past decade. Some studies have suggested that housing in London is overvalued by 35 percent or more.
But most signs point to a stabilizing market in which prices will rise nominally in the near future. The real estate agent Savills in London predicts sale-price inflation of about 4 percent a year over the next five years. “There’s room for renewed growth in the housing market, even though I admit there’s a lot of negative sentiment floating around right now,” said Jim Ward, research director at Savills.
Most specialists say prices have flattened out over the past year in Britain, and particularly in London, partly because first-time home buyers have been priced out of the market. New entrants made up 38 percent of the market in 2002, and nearly half of the market 10 years ago, but they account for less than 29 percent today.
A drop in demand from investors has also had an impact. So far in 2005, the number of pu
rchases by people who intend to rent out the houses, rather than live in them, has fallen 50 percent from a year earlier.
Solid employment rates and healthy household incomes have also helped to keep what some fear may be a price bubble from bursting. The Bank of England has also helped to temper the property market with increases in interest rates, which are now at 4.5 percent. – Shelley Emling
Moscow: Mortgage novelty
The tempestuous real estate market in Moscow is maturing, providing both lenders and home buyers with a feeling of stability as well as growth, analysts say. Moscow is not quite the boomtown it was in the first years of the millennium, when housing prices were surging 50 percent a year after the 1998 crash. Yet the residential market is still steadily increasing by 1 percent or more a month, according to Guy Emes, director of MosProperties.
Analysts generally do not expect any market softening here in response to the U.S. downturn. The most significant trend on the Russian horizon is the arrival of the home mortgage. So far they have been used very little because restrictions made them nearly unattainable by potential buyers and there was little protection for banks. All of that has changed under new mortgage laws, according to analysts, and a new generation of Russians may not be living with their in-laws much longer.
The outlook for 2006 points to further strong growth. There is still a boom in the development of land for construction near Moscow. As the wealthy carve more high-end luxury developments out of the forests close to the city, land prices have increased as much as 500 percent, according to Emes.
St. Petersburg’s housing market is on the same steady trajectory, as are many cities elsewhere in Russia, where percentage increases are huge but the actual cost of apartments and homes is low compared with Moscow. An apartment in a Russian city of a million people that cost the equivalent of $20,000 last year could cost $40,000 this year.
What is likely to soften is the market for commercial development. So many huge malls and complexes will be finished in Moscow next year that there will be a plethora of new offices and prices should go down in the next two to three years, according to Marti Wilan, development director for Asterra, a real estate consulting company in Moscow. – Nora FitzGerald
Spain: Trending downward
Recent forecasts from economists say Spain’s booming housing market is likely to cool this year. A study from the real estate appraisal organization Cohispania said prices would show growth of 12.3 percent for 2005, a drop from 17.5 percent last year.
Spain’s central bank said construction of residential housing during the third quarter appeared to be lower than during the first half of the year, and real estate agencies report that selling homes is taking longer than it did a year ago.
But the market has been showing signs that the sharp slowdown that some predicted early in the year was unlikely. After softening in early 2005, demand for mortgages reached its highest level in three years during the second quarter, and it was not expected to weaken over the short term, according to a report released this month by Spain’s central bank.
In Barcelona, housing prices appear to be increasing faster than they were at this time last year. A recent study by Idealista.com said prices were up 3.5 percent in the third quarter from a year earlier.
Several general factors have contributed to the Spanish city’s strong residential market. “There has been a housing boom but not a building boom, and that’s why prices are so high,” said Cameron Millalieu, owner of barcelonahomesearch.com, a local agency.
He noted that there was little land left to build on, with the sea on one side of the city and mountains on the other. There is also more employment and thus more money to spend on housing.
Growth in apartment prices across Barcelona, however, is decelerating. By Millalieu’s estimates, the market surged 25 percent in the year ending in May 2003, followed by rises of 17 percent and 10 percent in the next two 12-month periods. For the year ending in May 2006, he sees a further drop of 5 percent, with the slowest growth coming in wealthier areas. – Renwick McLean and Judith Rehak
Analyzing the True Paris
By Yolanda Robins
Photo by Allison Gorlin
The Chambre des Notaires recently released the latest real estate figures for the period ending June 30, 2005. Overall, Paris continues to experience growth, increasing 2.6% on average from the previous quarter. The average price per square meter as of June 30th was approximately 4,900 euros.
There were only two arrondissements that experienced negative or flat growth from the previous quarter — the 5th which includes the neighborhood of the Latin Quarter and the 6th which includes the neighborhood of Saint-Germain-des-Prés. The reason for the negative growth in the 5th and 6th can be attributed to a number of factors, including buyers seeking lower cost of entry and greater appreciation, and recognizing that better value propositions exist outside of historical tourist areas.
Second Quarter 2005 to First Quarter 2005
From the second quarter of 2005 as compared to the first quarter of 2005, property values in Paris increased an average of 2.6%, as previously mentioned. The greatest increase from the previous quarter was experienced in the 19th arrondissement comprising the neighborhoods surrounding the Parc des Buttes Chaumont and La Villette, and the 10th arrondissement, which comprises the neighborhoods near the Canal Saint Martin, République and Gares de Nord and l’Est. The 10th arrondissement, which borders the Marais offers very attractive values with current property prices between 5,900 euros and 6,300 euros per square meter.
Second Quarter 2005 to Second Quarter 2004
From the second quarter of 2005 as compared to the same period in 2004, property values in Paris ncreased on average over 12%. The areas which experienced the greatest growth, include the 9th, 10th, 18th, 19th and 20th, which increased more than 17% for the same period from the previous year. We continue to see a trend of “migration” in which areas outside of the “heart” of the city, such as the 10th, 19th and 20th arrondissements, are becoming more deve
loped with an influx of restaurants, galleries, bouti
ques and businesses investing in the community and contributing to the overall gentrification of these areas.
Deciphering the Variance
The valuations published by the Chambre des Notaires are approximately 30% to 50% less than current market valuations. The current market valuation contained in the accompanying analysis is compiled based upon an average of two dozen listings from various sources, including current listings by agencies and individual owners.
Why the difference? There are several factors contributing to this variance. First is timing. There is approximately a 90-day period from the time an offer is made on a property until the time of closing. Thereafter, the numbers may not be reported until up to an additional six months to the office of the notaire. That alone could account for the majority of the variance. Secondly is underreporting. This is when the reported transaction price may be different than the actual purchase price due to the fact that buyers pay the real estate agency fees directly thereby reducing the taxable amount and the fee to the notaire; listing inventory such as fixed furniture and appliances separately from the purchase price; and under-the-table transactions, which are illegal but do occur. And finally, there is dilution. The figures reported by the Chambre des Notaires are diluted as they are reported by an arrondissement in its entirety and do not take into account the differences within each arrondissement. For example in the 3rd arrondissement, an apartment located near the neighborhood of Rue du Poitou can be valued as high as 8,600 euros per square meter while an apartment in the same arrondissement near the neighborhood of Arts et Metiers will be valued at approximately 6,500 euros per square meter.
However, the true benchmark is the properties that you see during your search based upon location, amenities and the time it has been on the market.
Is There Still Room for Growth?
The answer is a resounding yes. Paris on the whole has been and is expected to have continued growth rates around 10% to 15% per year. Relative to other world-class cities such as London, New York and San Francisco, Paris is still considered to be undervalued with market valuations pacing at least 30%, and in some cases, 60% less than these cities. Paris has been and will continue to be one of the top global destinations and will continue to attract investors to support the short term rental market. Paris has regulations on construction and will therefore be limited by inventory that will never match its demand. So, if you’re a smart buyer, you can still find excellent values at a reasonable cost of entry and healthy appreciation, while benefiting from investing in the Euro economy.
Editor’s Note: Yolanda Robins is Property Search Consultant and is responsible for all property consultation and search services. For more information, contact her at
To view the complete price analysis by arrondissement, click here: https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/2005_RE_Figures.pdf
Paris Reports Increased Tourism!
Provided by the Paris office du Tourisme et des Congrès
Visitor numbers for 2004: positive results that should continue in 2005
Total number of tourists:
2004: 25 million
2003: 24.5 million
There was a marked increase in visitor numbers in 2004. Despite a reduction in the length of stay and a weaker “leisure” sector, the figures for the year are encouraging. Paris held its pole position in conference and congress tourism, being ranked number one by the Union of International Associations for the 25th consecutive year. The slight upturn should continue and may even strengthen in 2005.
Arrivals of foreign visitors (8.8 million) increased 7.5% compared to the period from January to December 2003, but did not reach the level of 2002 (down 2.7%)
Visitor numbers for all of the top 10 foreign nationalities in Paris increased between 2003 and 2004:
1. USA 1,411,800 +9.8%
2. Great Britain 1,396,800 +2.8%
3. Italy 792,000 +11.8%
4. Japan 683,600 +11.7%
5. Germany 665,700 +21.7%
6. Spain 540,100 +6%
7. Asia — Australia 401,800 +9.4%
8. The Netherlands 280,600 +8.9%
9. Central and Southern America 277,200 +21.6%
10. Belgium 265,700 +3.8%
Total foreign visitors: 8,747,450 +7.5%
Total French visitors: 6,445,100 +10.4%
Overall total: 15,192,550 +8.7%
Total number of entrances to the top 5 cultural sites in Paris: 5,861,694 (+4.2 % / January-April 2004)
Estimated daily tourist spending in 2003
Leisure tourism: all nationalities 209 Euros
Leisure tourism: by nationality
Japanese: 276 Euros
Chinese: 248 Euros
British: 245 Euros
Business tourism: all nationalities 266 Euros
Business tourism: by nationality
Americans: 326 Euros
British: 276 Euros
Germans: 264 Euros
The domestic market clearly plays a key role in growth: domestic arrivals (6.5 million) increased by 10.4% compared to 2003 and 10.3% compared to 2002.
Welcome to France
By Adrian Leeds
It was the first, but I’m sure it won’t be the last.
Expatica.com launched the very first Welcome to France Fair at the Carrousel du Louvre with more than 50 stands representing companies and organizations that an expatriate would want and need to make life in France as enjoyable as possible.
The Carrousel du Louvre is an impressive venue for such an event. When you enter, you may choose your path to the exhibition space: walk past the inverted pyramid built in 1989 designed by Sino-American architect Ieoh Ming Pei which weighs 180 tonnes, measures 16 meters on each side and is 7 meters high. It is undoubtedly one of the city’s most stunning structures pouring light into the underground entrance to the Louvre. Or from the other direction, you may walk through the vast hall past the unearthed archeological remains of the “Charles V complex” revealing the city’s 14t
John Howell, lead a
ttorney for John Howell & Co., London, and I shared Stand #1 — the first one at the entrance. Janie Howell, Yolanda Robins and Lynda Sydney were on hand to greet the attendees.
Hundreds of friends of Parler Paris and French Property Insider stopped by to say hello and ask questions about all sorts of immigration, lifestyle, legal and property issues, including Danièle Thomas Easton, Consul of France in Philadelphia and Wilmington (pictured with Yolanda Robins and third Philadelphian) and Pascal Fonquernie, Director of Parismarais.com (pictured with Lynda Sydney while John and Janie talk to attendees). Americans, British, Irish, Australians, New Zealanders, Scottish…and a host of other Anglophones transplanted in Paris paraded in and visited the stands, talked with exhibitors and each other, walking out with their Expatica bags over their shoulders filled with goodies. Many had their children with them, in strollers and in tow — but the one that won the prize was a pup in a baby tote strapped to the master’s chest!
Other exhibitors chatting it up included Parler Paris colleagues Lorin Kalisky’s Franglo.com site of free classified ads for Paris and France, Olivier Magny’s O-Chateau Wine Tasting, Patricia Laplante Collins’ Paris Soirées/Paris Network and Democrats Abroad.
Throughout the day, speakers took the podium on subjects such as “Reaching Your Full Potential in Paris” (Florence Beretta) and “Structuring Your Property Purchase to Minimize Tax” (John Howell). Entertainers from The Improfessionals performed “They Eat Frogs” and “I’m Not a Tourist” — both to big audiences.
The exhibitors and attendees seemed to all agree that for a first time out, Expatica had done a bang-up job of Welcoming us Expats to France and we quickly signed up for the same booth at next year’s fair.
Their newly published “Expat Survival Guide” — Your Essential Guide to Living in France — was on hand for all to take. I have a large stash to hand out at the conferences in San Francisco and New York this coming weekend and next week. To get your own copy and to receive their weekly newsletter about France edited by Clair Whitmer, be sure to visit http://www.expatica.com
Quality Urban Transport System that is Constantly Being Improved
From the Paris Office du Tourisme et des Congrès
Photo by Pamela Shandel
The tram will provide unprecedented regeneration for three of Paris’s arrondissements. Improvements to the landscape and urban regeneration are planned for the 13th, 14th and 15th arrondissements.
The city of Paris, the French state, the Ile-de-France region, the S.T.I.F (Ile-de-France transport syndicate) and the R.A.T.P. (Paris city transport authority) have come together to successfully co-manage this project.
Modern, faster and much more comfortable, the tram will offer a greater capacity and anticipates future increases in traffic. It will transport double the number of passengers than the current PC1 bus over an equivalent distance.
Some key stations located at the gates (portes) around inner Paris are undergoing major urban and landscape regeneration. Porte de Versailles in the 15th, Porte d’Orléans in the 14th and Porte d’Italie in the 13th will see a complete transformation of their urban landscapes.
The tram route covers 7.9 km between Pont du Garigliano and Porte d’Ivry: it will stop at 17 stations in 24 minutes and will operate 7 days a week from 5 am to 12:30 am.
Extension of tram line T2
Currently linking Issy-les-Moulineaux with La Défense, tram line T2 will be extended within the next five years to run from la Défense to Bezons (department 95). It will ease road congestion on Route Nationale 192 particularly during peak hours. The journey from La Défense to Bezons will take a mere 12 minutes and the 18 km from Porte de Versailles to Bezons will be covered in 40 minutes.
The new “CDG Express” rail link project between Paris-Est railway station and Roissy airport was unveiled on March 7, 2005. After much public debate, this project (called “Virgule”) will take an alternative route to the one that one originally proposed by the local resident association “Vivre sans CDG Express” (live without the CDG Express). This solution, costing 360 million euros, will cost approximately 200 million euros less than the solution initially planned, through the use of existing infrastructures and minimal use of underground tunnels. Work should start in 2008 with the CDG Express service opening at the beginning of 2012.
Over 200 stations are being renovated by the RATP to make them more functional and generally more pleasant. In addition, extensions to metro lines are either at the planning or construction stage.
Extension of line 12
The double-track 3.8 km tunnel will be opened in two phases:
1. 2008 between Porte de la Chapelle and Pont de Stains
2. 2010-2012 between Pont de Stains and Mairie d’Aubervilliers.
The line will be opened in two stages: Porte de la Chapelle to Proudhon Gardinoux, and Proudhon Gardinoux to Mairie d’Aubervilliers for the first phase.
Extension of line 13
Métro line 13 will be extended by 1.880 km to the North West of Paris with the creation of two new métro stations at Asnières and Gennevilliers.
The extension will cut travel times making the journey to Saint-Lazare station possible in less than 25 minutes. It will also improve the transport service in the area north of the Boucle de Gennevilliers enterprise zone with the arrival of the métro, the creation of bus links and eventually, a direct link with the planned T1 tram line towards Saint-Denis. The frequency of services will also be increased through the Ouragan system, which will improve the transport services by increasing the frequency of trains to every three minutes during the rush hour. The estimated cost of this operation, which will be accompanied by ongoing communication with local residents and users, is 158 million euros.
Extension of line 14 (Meteor)
Line 14 is continuing its route under Paris. After Saint Lazare in 2003, it should reach les Olympiades (formerly Tolbiac-Nationale) in 2006.
As part of its new policy to share public space and
safety, the Mairie de Paris aims to improve the quality of service and safety on public transport. Aside from creating designated bus-only lanes, it is implementing the Mobilien programme to restructure the bus network.
Mobilien is a major part of the Plan de Déplacements Urbains d’Ile-de-France (PDUIF — Ile-de-France urban travel plan), which was adopted in December 2000 as part of the law on air quality. One of the goals of the PDUIF is to reduce car traffic in the region by 5% by 2005. It is also concentrating on developing public transport and less polluting means of transport. Link to the Plan de Déplacements Urbains website: www.pduif.org
The city of Paris aims to create a surface “métro” service with a network of 17 routes to complement the rail network, providing a quality service to strategic parts of the capital, with the following characteristics:
* Broad range of services: operating 7 days a week from 6 a.m. to 12:30 a.m.
* Reliability: improve regularity by more frequent service reducing journey times by 20%.
* Accessibility: make the system accessible to people with reduced mobility by adapting buses and bus stops.
* Comfort: equip routes with new and better ventilated buses.
* Information: indicate the time the next bus will arrive at bus stops, and the journey time inside buses.
* Easy to read: favor an instinctive understanding of bus routes in the Mobilien network.
Work has started on the next Mobilien line
After routes 91 and 38, it’s bus route 27’s turn (Gare Saint-Lazare – Porte de Vitry) to profit from the Mobilien programme of improvements. Work started on January 24 on Avenue des Gobelins in the 13th arrondissement, continuing through Rue Patay and Rue Jeanne d’Arc (from February), Boulevard Vincent Auriol (from May) and Rue Claude Bernard and Rue Gay Lussac (from June). Work is due to be completed in November 2005.
This development work will bring much-needed improvements to the service, particularly the speed and regularity of the service, which is one of the most used routes in Paris with more than 35,000 passengers per day.
More civilised roads
Boulevard de Magenta in the 10th arrondissement
At the end of 2006, Boulevard de Magenta (10th) will create a new way of sharing public space. Pavements will be widened, cycle lanes and bus lanes will be created and cars will be limited to one lane in each direction.
Goodbye to the péripherique
Porte des Lilas in the 19th arrondissement
Work has started on the project to cover the péripherique (ring road) at Porte des Lilas (19th). At the end of 2006, the areas above the ring road will be used for bus routes and pedestrian areas featuring parks, leisure attractions and a cultural centre.
Work will soon start at Porte de Vanves and Porte de Champerret, and a project is at the planning stage for Porte de Vincennes.
Have your French experience published!
The Publications Department of Maison de la France/French Government Tourist Office is offering two contests that give you the chance to put your take on France in the FranceGuide magazine.
The official publication of Maison de la France/French Government Tourist Office, FranceGuide is an annual magazine with a circulation of 500,000. Printed in four different languages (English, Spanish, French, and Portuguese), it is distributed throughout the United States, Canada, Mexico, Brazil, Chile, and Argentina. The magazine is also available online in both English and Spanish.
* Where’s your favorite place to sleep in France?
* Share your best shots of France with us
All submitted work becomes the property of Maison de la France/ French Government Tourist Office, which may edit, publish, distribute or republish it in any form. By submitting written accounts or photographs to Maison de la France/French Government Tourist Office, you certify that your submissions are your own, original work that has never been copyrighted or, if copyrighted, that you are the sole copyright owner and you agree that Maison de la France/French Government Tourist Office may publish your work, as is, or as edited by Maison de la France/French Government Tourist Office, both in print and online, or in any other media, and you grant to it a license under any copyrights you have in the work to do so, without any financial or other compensation to you. [You will be acknowledged as the owner of the copyright in the work in publications and distributions of the work.]
INVEST IN FRANCE
October 26, 2005
Take just one day and learn from some of the finest experts in French real estate about the best ways to make your money and real estate investment grow. Join us at the prestigious Harvard Club for this power-packed one day event.
INVEST IN FRANCE
December 28, 2005
Enjoy your Christmas vacation in Paris, and set aside JUST ONE DAY of your busy schedule visiting museums and dining on foie gras to learn how to make your money grow, while building a portfolio of some of the most desirable real estate in the world.
For more information on The Invest in France Seminars or Living in France Conference, until we have our Web site up, contact Schuyler Hoffman, Projects Manager, at [email protected]/parlerparis to be put on a special mailing list to
be notified when the details are
in place (very, very soon!).
THE ART OF TROMPE L’OEIL SEMINAR
December 29 – January 2
Join a unique community of artists, engaging in hands-on painting and conversation with internationally renowned trompe l’oeil muralist and educator, Yves Lanthier. An award-winning artist, Yves has created large oil paintings and elaborate trompe l’oeil that adorn the ceilings and walls of many East Coast mansions and Palm beach estates, including Celine Dion’s estate in Jupiter, Florida
FPI Property Consultation, Search and Relocation Solutions
Let French Property Insider expert property consultants find your dream home in France for you. We consult with you to help you make the best decisions, ferret out the finest properties to meet your criteria, schedule the visits and accompany you, negotiate with the agencies and owners, recommend the notaires and other professionals, schedule the signings and oversee the purchase with you from start to finish! You could never do it so easily on your own. Let us take the time and effort off your hands.
FPI Offers More Relocation Solutions!
Let our experienced relocation expert help make your move easy and hassle-free. We offer complete property and relocation services normally only provided by employer hired relocation firms…but at a price much more affordable for individuals.
Solution #1: Property Consultation and Search Services
Solution #2: Purchase Assistance
Solution #3: Getting a Mortgage in France
Solution #4: Property Appraisal Service
Solution #5: The “Après Vente”
Apartments for Rent: Long-Term
To book your services, click here:
To download a free brochure, click here
TODAY’S CURRENCY UPDATE
Visit the FPI Web site and click on the link on the left panel “Click Here for Currency Convertor by Moneycorp” for up to the minute conversions of all major currencies.
Compare currency values easily and quickly by visiting: https://adrianleeds.com/frenchproperty/loan/moneycorpconvertor.html
Charts http://www.Moneycorp.co.uk/members/charts.asp The charts below are updated every ten seconds.
The prices shown are “inter bank” exchange rates and are not the rates that you will be offered by Moneycorp. Your rate will be determined by the amount of currency that you are buying. Please speak with an Moneycorp dealer or your consultant for a live quotation.
Parler Paris Après-Midi
NEXT MEETING: November 8, 2005 AND EVERY SECOND TUESDAY OF THE MONTH, 3 p.m. to 5 p.m.
This is your opportunity to meet every month, often with local
professionals who can answer your Working and Living in France questions. You are invited to come for drinks and share your questions and comments about what it takes to create a life here, own property and enjoy what France has to offer. It is also an opportunity to network with other Parler Paris readers.
Upstairs at La Pierre du Marais
96, rue des Archives at the corner of rue de Bretagne, 75003 Paris
Métro Lines 9, 3 et 11, stations Temple, République or Arts et Métiers
HOT PROPERTY PICKS: Up and Coming in the 19th
Each week French Property Insider features a range of properties which we believe are on the market at the time of writing. These properties are featured in order to give readers a sample of what is currently available and a working example of prices being asked in various regions of France and districts of Paris.
As we are not a real estate agency. These pro
perties do not constitute a sales listing.
For those readers seriously interested in finding property in Paris or France. you can retain our services to do the whole thing for you. For more information, visit https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/propertyconsultation.html
*** Paris, 19th Arrondissement, 4 rooms, approx. 100m²
On the third floor of a Haussmannian building, with elevator. Charming apartment with living room, dining room, kitchen, 2 bedrooms, bathroom and separate toilet. With cellar, hardwood floors, moldings and fireplace. East and west exposures.
Asking Price: 404,500 Euros + 2.5% Finder’s Fee
*** Paris, 19th Arrondissement, 6 rooms, approx 117m²
Near Parc des Buttes, Chaumont. Located on the first floor of a building on a quiet street, this superb apartment has a 40m² living room, 4 bedrooms, 2 bathrooms. With hardwood floors, fireplace, east and west exposures and gas heating.
Asking Price: 650,000 Euros + 2.5% Finder’s Fee
*** Paris, 19th Arrondissement, 5 rooms, approx. 137m²
Situated near Buttes Chaumont, this apartment is on the fourth floor of a cut stone building. Charming and comfortable in an splendid setting, it has 4 bedrooms and a southeast exposure.
Asking Price: 745,000 Euros + 2.5% Finder’s Fee
Next sessions: November 8, 2005, 2 p.m.
Notaires de Paris
Place du Châtelet
12 avenue Victoria
Additional information on Les Ventes aux Enchères des Notaires can be found on the website at http://www.encheres-Paris.com/ Though the site has a button for an English version, it isn’t reliable to work.
To read Schuyler Hoffman’s article about the property auctions in Paris, click on:
5 rooms 158,4 m²
6 rue de Seine
75006 PARIS 6th
Opening Bid: 1,735,000 Euros
4 rooms 88,50 m²
28 rue Jacob
75006 PARIS 6th
Opening Bid: 587,000 Euros
3 rooms 55,5 m²
15 rue du Louvre
75001 PARIS 1st
Opening Bid: 190,000 Euros
Studio 29,5 m²
15 rue du Louvre
75001 PARIS 1st
Opening Bid: 110,000 Euros
3 rooms 62,7 m²
10 rue Chaligny
75012 PARIS 12th
Opening Bid: 260,000 Euros
SEEKING A MORTGAGE IN FRANCE?
Let us help you secure a mortgage in France with interest rates as low as 3%. Visit https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/loan for more information.
INSIDER PARIS GUIDES DISCOUNT FOR
that with your FPI subscription you are entitled to a disco
unt on the purchase of any Insider Paris Guides. You’ll find details of the guides at http://www.insiderparisguides.com/. When ordering, a box will pop up allowing you to enter the following username/password
Order more than one guide at a time and you will receive an additional discount!
Username: propertyinsider Password: liveinfrance
THINGS YOU NEED TO KNOW
To access password protected pages: click on any of the links on the left panel of the home page of FrenchPropertyInsider.com under “Subscriber’s Only,” then type in your personal username and password.
Past issues of FPI are available on the website. You will find the
“Past Issues” link on the left under “Subscribers Only” or by going to
To receive your free French Leaseback Report or the Paris Property
Report, click on
HELPFUL CONVERSIONS FOR REAL ESTATE
1 square meter = 10.7639104 square feet
1 hectare = 2.4710538 acres
For more conversions, refer to: http://www.onlineconversion.com/
Leeds Marais Apartment
Available in its entirety November 22 – 28, 2005
Located in a 17th century Le Marais Hotel Particulier, this 70 square meter two-bedroom apartment with lots of light is nicely furnished and is perfect for up to four people when rented in its entirety or a single woman in the freshly renovated guest room when owner Adrian Leeds is there.
Pictures and more details available at
Paris, 6th Arrondissement
Near Musée Delacroix. One bedroom apartment with mezzanine, on the first floor of a building with elevator. Full kitchen, dining area, 1 bathroom with tub, carpeting.
Rate: 3000 Euros/month
November 15 to December 8, 2005
Second week of January to March 2006
To reserve, please contact Lynda Sydney at [email protected]
For all short term rental apartments in Paris, take a look at https://adrianleeds.com/wp-content/uploads/newsletters/parlerparis/apartments or https://adrianleeds.com/wp-content/uploads/newsletters/frenchproperty/insider/longterm.html for long term apartments.
SUBSCRIBE TO PARLER PARIS
If you’re not a regular reader of the Parler Paris daily e-letter, and would like to be, simply enter your e-mail address here (it’s free!): http://www.adrianleeds.com/parlerparis
Copyright 2005, Adrian Leeds Group, LLC