Paris vs. New York

I’m currently in New York to attend my daughter, Erica Simone’s, book launch/signing and exhibition of “Nue York: Self-Portraits of a Bare Urban Citizen” at the Castle Fitzjohns Gallery opening tonight at 7 p.m. Thanks to the time of year, air fare was less than $600 making it affordable to come for just a few days. I wouldn’t have wanted to miss the event!

She and I purchased an apartment together in the West Village in 2008 when the euro was equivalent to $1.50, taking an equity release loan based on my Paris properties. This meant the euro’s strength made it possible to purchase 50% more property than otherwise. Now that the rate of exchange is less than $1.10, the property has increased in value solely based on the rate of exchange, much less the increase of property values in New York.

Of course, New York has also been on an uphill scale and likely always will be with an occasional glitch…similar to Paris. Since 2008, the average price per square meter has increased from about $1,200 to $1,450. The West Village is one of the city’s most desirable neighborhoods with a current average per square foot rate of $2,193, an increase of 14.1% in just one year. When we purchased the apartment, the price per square foot was $1,050. The only neighborhood pricier than the West Village in Manhattan is Gramercy Park with $2,374 per square foot, and with an increase of 27.6% year over year.

Were we smart or did we just get lucky? Both.

Luck struck when the planets aligned — the rate of exchange was favorable at a time when Paris properties had greatly increased in value, enabling borrowing capacity against the Paris properties. Smarts came into play when making the decision to make use of the rate of exchange and choosing to purchase in a central district that could not go “up or out” — making the property there more finite — where as other districts may be booming with high-rises increasing the number of properties on the market and thereby reducing values.

When purchasing property in Paris, the same principles apply and the planets are aligned at this moment. The rate of exchange for those purchasing with dollars is very favorable — less than $1.10 per euro. Interest rates on mortgages are at an all time low — under 2.5%. Prices are ‘soft’: while prices in Paris are up 14.4% over the last five years, prices are down this past year by almost 1%. Now’s the time to get into the Paris market.

Buying in central Paris is every bit as smart as buying in central New York. Remember: location, location, location. In the districts that are historically protected, there will be no “up or out,” making property there finite and therefore the most valuable. Stick to districts 1 through 8 for the least amount of risk in the long term.

Like the timing was right for our purchase in New York in 2008, the timing is right for purchasing in Paris today. And interestingly enough, the cost of living in Paris is considerably lower than in New York. According to Numbeo.com  you would need about 4,408.64€ ($4,791.48) in Paris to maintain the same standard of living that you can have with $7,300.00 in New York (assuming you rent in both cities). Consumer prices in Paris are 17.27% lower than in New York. Consumer prices including rent in Paris are 34.36% lower than in New York. Rent prices in Paris are 53.01% lower than in New York. Restaurant prices in Paris are 18.92% lower than in New York. Groceries prices in Paris are 21.31% lower than in New York…but one thing is higher: local purchasing power in Paris is 10.37% higher than in New York.

Let’s also keep in mind the standard of living, not just the cost of living. It’s tough to quantify as ‘standard’ usually translates to ‘cost,’ but not in this case. What I’m referring to has to do with lifestyle, not the cost of it. For me there is no comparison between a New York lifestyle vs living in Paris. At any price, hands down, I’d choose Paris over New York for all the things I’ve come to love about it: beauty, architecture, art and culture, cuisine, etc., etc., etc.

But, I don’t have to tell you that. This you already know.

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected]

P.S. I invite you all to come to the opening tonight. If you can’t be there because you live in France, and wish to have a copy of the book, I can sell some of my stash (75 — that I carried up my stairs Tuesday all by myself!) for $50 each. Email me at [email protected]

P.P.S. I am co-sponsoring another “American Expat Seminar in Paris” with special guests Brian Dunhill & Carl Mir. Topics include your financial future abroad and updates to filing your US taxes while abroad. Details are available on our Conferences and Workshops page.