The Île-de-France region, which includes and encircles Paris, suffers from a shortage of homes, largely owing to the poor rate of housing construction, relative to the size of the market. A strict planning approach, especially in Paris, is mainly to blame for this situation. Thankfully, as part of a policy to increase housing stock, Paris officials have pledged to convert 250,000m2 of empty offices into housing by 2020. However, for the time being, the demand for homes in Paris – for both owner-occupation and investment – far exceeds the supply.
Where to buy and prices
Your financial aims will determine where in Paris you decide to buy an investment property. The city consists of 20 arrondissements but we don’t recommend that you look at all of them. Overseas buyers account for 9.2% of apartment sales in Paris and 9.5% in the Île-de-France region. In the 4th and 7th arrondissements the proportion of overseas buyers is higher at around 17.5%.
The most expensive properties tend to be in the 6th arrondissement, which comprises the prestigious quartiers of Saint-Germain-des-Prés, La Monnaie, l’Odéon and Notre-Dame-des-Champs. Prices in the 6th can reach €25,000 per square metre. The 7th (Saint-Thomas-d’Aquin and Les Invalides) and 8th (the ‘Triangle d’Or’) arrondissements are close behind, at around €21,000; closely followed by the 4th at €20,000. Property prices just outside central Paris are considerably lower. For instance, Neuilly-sur-Seine to the west of the capital offers more reasonable properties at between €9,000 and €15,000 per square metre, while in nearby Boulogne-Billancourt prices range from €7,000 to €11,000 per square metre.
Renting in Practice
The majority of investors in Parisian property choose to rent it out for at least part of the year, to respond to the needs of the city’s large international community – mainly business people, MBA students and academics – who are always searching for longer-stay furnished and serviced accommodation. This is the recommended rental market to aim for if you wish to achieve good returns on your investment.
One-year furnished Paris rentals suit owners who prefer the security of a steady income and can ‘block off’ their property for longer chunks of time.
We don’t recommend short-term tourism rentals due to restrictions by the Paris authorities. You’ll need to take into account the cost of property management and marketing plus their accountability and your ability to work efficiently with these providers while being based abroad. In many cases, finding an experienced management company will mean that there won’t even be any need for you to visit Paris; it can all be handled on your behalf.
That said, you’d probably love any excuse to visit Paris so why not book your property yourself? This can normally be arranged at a quiet time of year or between tenants.
Susie Hollands is one of the FrenchEntrée Property Services’ real estate partners in Paris.
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