Beyond the boulevards: buyers are targeting a less sought-after Paris

There was a sense of fate in the purchase of an apartment in Paris by actor Mikaël Mittelstadt. After living in California and then in Languedoc playing in the French soap opera Here it all startsthe 24-year-old bought a studio with a view of the Sacré-Coeur in Montmartre.

“This summer, I was planning to buy my first house in New York or Paris, but with my Franco-German passport, it was easier in France,” he says. “My parents met at Sacré-Coeur, so it was a sign that I had to buy the apartment,” he adds.

International buyers have helped fill the void created by Parisians seeking space leaving the city center for the suburbs or other cities in France. Yet there are not enough of them to prevent average prices from falling. Even before the European Central Bank raised interest rates in September, this was evident – in the year to July, the average price in Paris had fallen by 2.1%, according to the association. French real estate agents, the FNAIM.

Although mortgage rates are still relatively low, around 2-3%, further hikes from the European Central Bank are expected, and with the uncertainty in the cost of living and the energy crises, buyers have started to hold on. “Three months ago, correctly valued properties sold within a fortnight, but now there are not enough buyers,” explains Helena Hermanns of Leggett Immobilier. “It’s the quietest we’ve been in five years.”

The Canal Saint-Martin, in the 10th arrondissement, is a popular alternative to the traditional center of Paris © Hemis/Alamy

She says “correctly priced” properties are still selling – such as a 23m² studio for €315,000 on Île Saint-Louis, an island in the Seine, bought last month by a French investor – a seller of goods — who intends to renovate and resell. “Other properties are sticking and we are lowering prices,” she adds. A three-bedroom duplex in the Marais has been reduced from €1.87m to €1.7m this year.

At higher prices, agents report that international buyers are still active. “American buyers are the most interested, but we also have some from Asia-Pacific and the United Kingdom looking to buy second homes in Paris,” says Yves Romestan, managing director of YRSA Residences by Progedim, a real estate agency. . “Strong activity on the luxury side may mask the real price drop, which is perhaps between 5 and 10% in traditionally popular areas such as 7th, 8th, 15th and 16th [arrondissements].”

Wealthy U.S. tech and logistics entrepreneurs who have profited from the pandemic have sought to take advantage of the U.S. dollar rising about 20% against the euro from a year ago, says Hugues de La Morandière de Savills Paris. “They could have multiple residences, maybe a kid studying in Europe and looking at the comparative affordability of Paris to London and New York.”

Map showing Paris and its surroundings in France

Will, who does not wish to give his real name, moved to Paris with his wife and children from New York in June and chose a 100 sqm three-bedroom serviced apartment in the “Golden Triangle” near the Champs -Élysées for €2.1 min. “We moved to Paris for a better quality of life and 8th grade felt safe and convenient to everything,” says Will, who joined a Paris-based multinational tech company and enrolled his son and daughter in the international school. Jeannine Manuel.

US buyers were also active at the top of the market. Of the four parties currently interested in an off-market €50 million property in the 6th arrondissement, two are American, says Edward de Mallet Morgan of Knight Frank’s super-prime division. “We note the interest in Paris from investment funds but also from individuals looking for heritage assets. Significant sales validate the strength of the market for buyers planning to spend 10 or 20 million euros.

The price of high-end Paris housing rose 8.9% in the year to June 2022, according to Knight Frank Research, to €21,500 per sq.m. In 2021, there were 22 super-prime sales (€10 million or more) across the city, a figure higher than in all of the past five years. In the first six months of 2022, there have been 13, including the sale of a property for more than €200 million on Île Saint-Louis, which was allegedly bought by French telecoms billionaire Xavier Niel to Sheikh Abdullah bin Khalifa al-Thani of Qatar.

There has also been a shift from the established classic areas of the 6th, 7th and 8th arrondissements and the Marais – to the 10th, 12th arrondissements and parts of the 20th, such as Belleville, where buyers hope to benefit from greater price growth . . “Young couples with good jobs are looking to previously less desirable sectors in the East,” says de La Morandière.

A view of classic Montmartre at dawn

A view of classic Montmartre at dawn © Alexander Spatari/Getty Images

“Rather than the status and formality of life in the 16th, they are looking for organic food stores, concept stores, the possibility of cycling to work.” According to him, a typical purchase for this type of buyer might be a two or three bedroom apartment in a Haussmannian building costing between €11,000 and €12,000 per m².

Londoner Patty Rowe has swapped the “traditional, family-friendly” leafy boulevards of the 15th arrondissement for the 10th. She went from a small studio to a 33m² one-bedroom apartment on the Saint-Martin canal which she paid €350,000 in August after saving money during the pandemic.

“I have a dozen bars on my doorstep and I feel like the neighborhood is booming. I like the lack of snobbery,” says Rowe, who works in marketing. “I only intended to stay in Paris for a year but I can’t imagine leaving now. I think I can have a much higher standard of living here than in London.

Meanwhile, families are heading to the western “green belt” of Yvelines for international schools, golf courses and parks, says Yves Romestan. He says the popular towns are Versailles, Marly-le-Roi, Saint-Germain-en-Laye, Le Vésinet, Saint-Nom-la-Bretèche, Maisons-Laffitte and Bougival. “Closer to Paris, Neuilly-sur-Seine has become even more desirable than the 16th arrondissement.”

Peri-urban areas will be better connected to the city center in the years to come. The Grand Paris Express project will add 68 new stations and 200 km of new metro lines, as part of the Grand Paris project to create new housing, schools and businesses on the outskirts of the city. The regeneration of the north of the city for the Paris 2024 Olympics is attracting investors: in Saint-Denis, for example, the average price per square meter has increased by 8.6% over the two years to October, according to Meilleurs Agents .

Belleville is an area of ​​gentrification where buyers hope to benefit from greater price growth

Belleville is an area of ​​gentrification where buyers hope to benefit from greater price growth © Soma/Alamy

Downtown landlords also plan to cash in on the Olympics, using their right to rent their homes on Airbnb for up to 120 days a year. “All my friends are considering renting their apartment,” says Rowe. She’s relieved to be away from the “apartment-finding horrors” of the competitive long-term rental market. “It’s common to see 30 people queuing outside an unattractive ‘shoebox’ apartment clutching their papers,” she says.

Charlotte, a fashion student in La Rochelle, who did not want to give her real name, started an internship at Christian Dior Couture in September and needed an apartment. “You have to email agents or individuals your ‘financial record’ before visits, which exposes you to all sorts of potential impersonation and identity abuse as it contains your payslip, contract work, your passport or ID card, a utility bill,” she said. said.

“We had spent three days researching adverts and tours when we saw an advert in the Marais and contacted the owner seconds after it went live. After sending my file, the agent told us that she would choose 10 people to see.She withdrew the ad after an hour, after receiving 340 applications.Having her father with her as a guarantor offering an immediate deposit helped her secure a 15m² flat for €900 per month (without electricity bills).

Mikaël Mittelstadt is also looking forward to spending time in his small apartment. “With auditions for a new role [around the world] I’ve only spent a few nights there so far but Paris is as magical as when I lived there as a child.”

Purchase guide

  • The average price in Paris in July was €10,659 per m², according to the FNAIM.

  • The costs of buying a second-hand item represent 7 to 8% of the selling price.

  • For the Olympics, a 52-hectare site 7 km north of the center is being developed in the village which will provide 2,800 new homes.

What you can buy. . .

Apartment, 17th arrondissement

Apartment, 17th arrondissement, €570,000

A one-bedroom apartment with 46 m² of living space and two south-west facing balconies. The apartment is located in a 1930s building in Batignolles, less than half an hour’s walk from the Arc de Triomphe and the Seine. For sale with Savills.

Duplex apartment, 2nd arrondissement

Duplex apartment, 2nd arrondissement, €1.75m

4-room apartment of 128.5 m² located on the fourth and fifth floors of a building between rue de Rivoli and the Seine. A glazed ceiling lets in natural light in a living space of 44 m² in double height. For sale with Knight Frank.

Apartment, 16th arrondissement

Apartment, 16th arrondissement, €8.9 million

Five-bedroom apartment in the La Muette district, approximately 350 m² of living space. The property is in a period building with 3m ceilings and overlooks a private garden. For sale with Christie’s International Real Estate.

Check out our latest stories first – follow @FTProperty on Twitter or @ft_houseandhome on Instagram

Comments are closed.