Plan Ahead, Paris Property Prices Up, Sold to the Lowest Bidder, To Register or Not to Register?

PLAN AHEAD

You’ve had it your mind to own a “pied-à-terre” in Paris or the Riviera or anywhere in France and now the economic and political climate is pushing you over the edge to finally fulfill your dreams, right?

You’re right to do so. This is the perfect time to get into the property market in France…as prices are on the rise (and will show an even greater increase in values in the years to come, particularly in Paris thanks to the win of the 2024 Olympic Games bid), mortgage interest rates are still ridiculously low (under 2%) and the market is up meaning your cash investments are doing well.

So, you’re coming to France, have a few days to look at properties and you can’t wait! Right? We know because our phones are ringing off the hooks and emails are piling up in the inbox with people like yourselves who realize what an opportune moment this is. But, you need to be prepared for having an experience that will not be the same as the one you’ve had in North America.

Here are just a few reasons why:

1. There is no Multiple Listing Service (MLS) in France and that’s why consulting agencies such as ours exist.

There is no one place you will find all the properties on the market. Even the chain agencies, such as Century 21, ERA and Orpi are franchised and each agency has an owner and its own team. Each agency lists its own properties, although some properties are listed with multiple agencies, often at different prices. Even the biggest websites with thousands of listings only list those which are paid to be there and there is no obligation by the sellers or the agencies to use their services. And here’s the most important part of all — the agents/agencies are loathe to share their commissions, except on properties that are hard to sell or the price of the property is so high that even half the commission is acceptable, and in Paris, the agencies almost never share…period.

In effect, the agents work for the seller and not the buyer. As the buyer, they don’t care what you buy, as long as you’re willing to spend your hard-earned money with them. They will tell you almost anything to make the sale, and while I have tremendous respect for the agents who work very hard, you shouldn’t’fully trust them to have your interests in mind.

Property consultants who are hired by the buyer solve this problem — they provide access to all properties on the market, bring with them a level of clout to the agencies because their clients are paying them, meaning they are serious, and they advise and protect their clients. Whether you work with us or another agency, I recommend that you spend a little bit with the professionals to save a lot by avoiding the pitfalls along the way and ensuring you’re making the best investment you can make.

2. There are no lock-boxes on the door to give the agents immediate access and they only work normal hours weekdays.

Don’t expect to come to France with only a few days time and immediately visit suitable properties on your short schedule. Sure, you can walk into any agency door (weekdays) and they will conjure up a few properties for which they have keys and the owners are absent to enable your visit, but you will likely be wasting your time visiting properties that are not necessarily a good fit for you, but are what the agency can show at that moment.

A proper search takes a good week in advance to do the research and set up the visits with the agencies and the owners, so…plan ahead. Besides, you will want time in advance to talk at length with your property consultant who can help put you in the right direction to make the best decisions, right? And some times of the year are particularly undesirable because there is so little access to the properties and so few properties on the market: July 15th through August when all of Europe is on vacation is one, and December 20th through the first week of January when families are together for the holiday season is the other. Other than these times, the market is wide open.

3. Don’t low-ball an offer on a property thinking the seller will respond with a counter offer.

The French are not negotiators. They detest discussing money and find it a disgusting necessity. Prices are set at not much more than 5% above their true bottom line, so offering any less could insult the seller to the point of refusing to work with you entirely. If you offer asking price, the seller is morally obligated to accept it (there are no bidding wars), so if the property is hot, hot, hot, you risk losing it by offering any less. Don’t be penny wise and pound foolish — if it’s a good property and you love it, don’t let a few “shekels” stand in your way of a lifetime of happiness and reward.

Note: The Adrian Leeds Group was the first in the Paris market to offer this service, as long ago as 2002. We provide property search and purchase assistance, plus the due diligence and hand-holding from beginning to end. For more information, visit our website or contact us at [email protected]

PARIS REAL ESTATE: NEW SALES RECORDS AND RAPID PRICE INCREASE IN PARIS

According to the latest data from the Paris-Ile-de-France Notaires, at the end of July 2017, the rise in prices is accelerating in Paris, where a new price record has been reached, yet remains more moderate in the suburbs. The dynamism of activity in the region is continuing as previously predicted.

In one year, from July 2016 to July 2017, prices for resale homes increased by 4.3% in the Ile-de-France (+5.2% for apartments to 5,640€/m², +2.2% for houses to 301,500€). This acceleration of the rise in prices mainly concerns Paris. Developments are expected to be more moderate in the suburbs by November 2017.

In the Capital, the price per square meter of the resale apartments rose by 3.1% in three months and by 6.8% in one year, reaching a record price of €8,790/m² in July 2017. According to prices on pre-sale contracts, the price is expected to exceed €9,000/m² in Paris in November 2017, an annual increase of almost 9%. This acceleration of the rise in prices remains limited to Paris.
 
The dynamism of the Ile-de-France business has continued. Thus, from May to July 2017, 55,510 resale homes were sold in the Ile-de-France. In 20 years, such a quarterly level of activity had never been recorded. Former home sales volumes increased by 19% compared to May to July 2016, more than one-third in relation to the past 10 years, and 14% compared to the average level of activity in the very dynamic phase of 1999-2007.
 
The annual increase in sales has benefited as much for apartments (+19%) as houses (+20%), and all the districts of Paris are experiencing a surge of activity. Surprisingly, the summer period did not discourage purchasers and sales volumes remained at a very high level in August 2017. (This is contrary to the norm, as expressed above.)
 
Consult the pdf version of the monthly press release of October 3, 2017.

GOING ONCE, GOING TWICE, SOLD!

According to a recent article in Connection France, a new style property auction is being used to sell properties quickly, with prices dropping rather than rising.

It’s a new way of looking at the same kind of sale. An old friend of my daughter’s suggested the idea to me a long time ago and I told her she was nuts! Now I have to eat my words. Called a “vente au cadran” or “vente à prix dégressif,” the new style of auction is being used for the sale of a multi-million euro villa on the Riviera this month.

In this case, the sale starts with a high price and falls by a certain fixed amount every 30 seconds for 20 minutes to reach the reserve price, set by the seller. One way or another, the property will sell very quickly!

Read all about it.

TO REGISTER OR NOT TO REGISTER? THAT IS THE QUESTION.

The city of Paris has just published its new website on which you are now obligated to register your property if you wish to rent it in part or whole for less than one year. This applies ONLY to primary residences.

If your property is your main residence, whether you own or rent it, you can rent it as short-term furnished accommodation without prior authorization from the City Council up to 120 days/year, but after obtaining an online registration number.

If not, and the property is a secondary residence, a furnished apartment as a seasonal or short-term rental (less than one year or 9 months under the student lease) in a dwelling which is generally not the principal residence of the owner, a change of usage is required.

Not so fast…this change of usage is very difficult to acquire (almost impossible, as the homeowner association of the building must also agree with the change in usage) and is very costly — about €1,600 per square meter with very large gaps, ranging from €400 per square meter to €3,000 per square meter in the western and central districts of the city where demand is strongest.

So, you’re the owner of a secondary property that you use part of the year and rent the rest, but now find yourself in this predicament? To register or not to register? That is the question.

First of all, you can’t register a property that is illegal. So, don’t! But, don’t panic!

Remember that no one can tell you who you let stay in your property, no one — not your neighbors, and not even the city of Paris and its team of 25 who are determined to restrict your rights as a property-owner — can tell you that your friends, relatives and even your guests can not stay in your property. There is only one thing that differentiates them from renters: financial compensation. And let’s face it — it costs you something to house them and we believe you should be reimbursed for your expenses. How you handle that is your business.

Our advice is to do nothing without consulting us or another professional in the field. The city gives homeowners no choice but to find ways around what we believe are unfair regulations. Don’t make rash decisions about your property. Let us help you manage the dilemma effectively and show the city administrators that they do no one any good. Contact us at [email protected] for a consultation, and let us give you good advice.

A bientôt,

Adrian Leeds
Adrian Leeds Group

Respond to Adrian:
[email protected]

 

 

   

 

P.S. Don’t waste time while prices rise! If you’re thinking of investing in France, now is the time! Contact us for more information on how to get started: email [email protected] or complete our online form for a one-on-one consultation, by phone or in person. You will find this time and small investment in reaching your goals very, very valuable — move ahead in your goals to invest in France, schedule your consultation today!