The more serious repercussions of the Syrian civil war are being talked about at the moment, but for now, it seems that for the luxury property market in Paris at least, it’s an ill wind that doesn’t blow some luck
The luxury homes market has reignited in Paris. According to property professionals in the French capital, many of them are being bought by well-heeled purchasers from the Middle East who are fleeing the region due to fear that it is inching towards a wider regional conflict.
A private mansion of 2,600m2 dating from the end of the 19th century was recently sold for €44 million. It was in the very chic 16th arrondissement and the buyer was a member of a royal family from one of the Gulf states, according to specialist agency Daniel Féau.
Even though such transactions are still rare, it is taken by most as indicative of the market for rare luxury property being on the rebound since summer.
This uptake in luxury sales (i.e. sales above €1 million) is linked to a drop in price of the order of 8% in this sector over the last year. Overall, luxury sales represent about 5% of Parisian property transactions, according to Daniel Féau.
According to another luxury property specialist – Emile Garcin – the drop has been about 15% in the last 18 months or so and prices have now stabilised.
But the other significant factor, Daniel Féau insist, is down to the “arrival of purchasers from the Middle East who are fleeing the growing insecurity of the region, which is linked to the Syrian situation.”“Many – especially Lebanese – are very worried about how the Syrian situation is developing and they follow family or friends exiled in Paris, where there’s already a sizeable Lebanese community,” declared Charles Marie Jottras, President of Daniel Féau on AFP.
Some rich Syrians are already in France, having left their homeland earlier, according to the agents.
Like London, Paris has a tradition of welcoming clients from the Middle East: in the petrol kingdoms, the grand-parents might have had a mansion on Avenue Foch… the grandchildren would have more likely gone to study in the United States, but this third generation is coming back here,” notes Mr Jottras.
“This week, we’re closing sales with a lot of Lebanese,” says Nathalie Garcin, who is a partner in this family company. “These are worried families, who don’t want to let everything in their own country and who are also investing in London… It’s quite a taboo thing, they don’t really talk about it but their unease is palpable,” she says. “We also have a lot of purchasers from Qatar.”
Outside of that, the rest of the buying international clientèle that has been active since the summer of 2012 is coming to the market of beautiful Parisian residences with the “feeling that they’re buying at a time when good value is to be had in this sector,” says Mr Jottras, who says that this is particularly true of Americans, many of whom traditionally have a soft spot for Paris. “The image of France being a tax hell is beginning to fade: the Americans have grasped that they are unaffected by most of the newer tax regimes.”
Russian buyers who are somewhat concerned by political developments in their own country “seem to be seeking a certain amount of security for a share of their inheritance,” according to Mr Jottras, who notes that they are very much present in the market, along with the Chinese.
In contrast, the luxury homes market in the rest of France is not out of the woods yet, even though the more fashionable areas remain resistant to the overall stagnation. These would include such places as Provence, Les Alpilles, Lubéron, Saint Tropez and the Côte d’Azur, says Emile Garcin.