Paris Property Tripled In Four Years
Paris Property Tripled in Four Years
Friday, June 11, 2004
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Dear Parler Paris Reader,
Every day I thank my lucky stars that I own the apartment I’m living in rather than renting. In fact, not long ago, by chance I stumbled upon my ex-landlord and thanked her by inviting her and her husband to could come see all the renovation work and improvements I’d made to the apartment.
The apartment had been a furnished rental (mostly to American tenants) and two years later, for personal reasons, they decided to sell it. As a tenant, I had first right of refusal. After a long and arduous process, I managed to amass enough of a down payment, get a mortgage here in France and call it home.
At the time when the transaction was about to take place in the Summer of 2000, the stock market went on a serious decline, so the investments I had in stocks and mutual funds would have been greatly reduced if I hadn’t sold them in order to make the down payment. Also at the same time, the rate of exchange was at a high — the dollar was strong against the franc — a little more than seven francs to the dollar, equivalent to a little more than one euro to the dollar. Because the purchase did not involve an agent, the owners had no loss of rent and no need to make improvements in order to put it on the market, I benefited from a very reasonable sales price. Consequently, it was the perfect moment to buy.
Property prices in Paris have continually increased on the average more or less 10% per year since 1995. Naturally, each arrondissement has proven to increase or decrease differently, but overall the city continues to enjoy a strong growth. In fact, last year one of our clients purchased an apartment in the heart of Saint-Germain-des-Prés for 350,000 euros that had been purchased 30 years earlier for just 18,000 euros — that’s an 11% per year appreciation. That apartment is now offered on short-term rental and from what I understand, has stayed well rented and therefore a solid investment.
The Marais, and particularly my tiny part of it, has become one of Paris’ wisest investments. The 3rd arrondissement has seen price increases as high as 16.7% and not lower than 11.5% since purchasing the apartment in four years ago. The average price per meter reported for 2003 in the 3rd is 4,623 euros, but we know that the property market commands 30% to 50% above the last reported figures. Comparable apartments (Century 21 advertised properties June 2004) are selling between 400,000 and 500,000 Euros. At today’s rate of exchange, that’s a range of $488,000 to $610,000, three times the $200,000 I paid four years ago!
The strong real estate market in Paris and a change in my status this year now leads to a new development: the lender is now offering me a mortgage of 110% to purchase an apartment designated as a rental property. In effect, with a resident visa (Carte de Résident), no down payment nor cash for Notaire’s fees (abut 8%) will be necessary and as long as my income along with the anticipated rental income can justify the mortgage, another Paris apartment can be mine free and clear.
Apartments that have tenants are traditionally more difficult to sell and often are sold at bargain prices, but both become an advantage in this instance as the lender will consider the rental income as stable.
The point is purchasing in Paris is still a sure bet and mortgages are fairly easy to obtain. For more information about purchasing property in Paris, consult our property expert, Jocelyn Carnegie, at [email protected]. For more information about mortgages, visit /frenchproperty/insider/mortgage.html and don’t be afraid to drop an email to the lenders we recommend there. We work with others, too, so be sure to ask Jocelyn who’s the best lender for you.
A la prochaine…
P.S. This week’s property picks are all For Sale by Owner, are all three rooms and approximately equivalent in size to my apartment and within the same price range and general central location.
Each week Paris Property Picks 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 districts of Paris. As we are not a real estate agency, these properties 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 /frenchproperty/insider/propertyconsultation.html
* Further resources:
In historic classy district of Ile de la Cité, place Dauphine, 3 rooms very bright, on 6th without lift, kitchen, bathroom, collective heating, cellar, digital code security system. Car park public within a few meters. 572,000
Asking Price: 572,000 Euros + 2% Finder’s Fee
3 rooms, charm, opening onto courtyard planted with trees, 73 square meters: large kitchen Provençal, fireplace, 2 bathrooms/toilets, picture windows interior, wooden beams , marble and terra cotta tiles floor surface. Near all services and leisure activities. 5 minutes from Beaubourg.
Asking Price: 398,000 Euros + 2% Finder’s Fee
Subway Temple. Fine period building, cleaned facade in 2003. 3/4 rooms, very bright, very peaceful, parquet floor, 70 square meters, on 2nd, entirely remodeled, charm with half-timbering, large living room, double exposure, open kitchen entirely equipped, 2 large bedrooms (possible 3rd bedroom), bathroom, individual gas heating, reinforced door. Intercom, caretaker. Cellar, car park in courtyard in use of.
Asking Price: 398,000 Euros + 2% Finder’s Fee
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