Translate this Page.
PARIS Real Estate Finders (PREF) |
Questions? Suggestions for future topics?
|
Back to Paris Real Estate Finders (PREF)
Panama More Expensive than Paris?
(excerpted from ExpatExchange May 1,2008)
By Kathleen Peddicord
[… Author’s husband’s budget] “shows that it will cost more for our little family to be in Panama City, Panama, than it has cost us to be in Paris, France.”...
My husband the accountant assures me his numbers are correct, and, indeed, holding aside the cost of housing, which we're considering separately, it appears our day-to-day cost of living will be higher in Panama than it's been in France.
On the one hand, this is a comment on how affordable Paris can be. This [Paris] is a place where even a modest lifestyle can feel rich, where the greatest pleasures--strolls along the Seine, afternoons in the Luxembourg Gardens--come gratis.
In Paris, we're happily car-free. We walk nearly everywhere. The butcher, the baker, the grocer, the wine shop, and Jack's school are all less than 15 minutes' walk from our apartment, as are the Tuileries gardens, the Louvre, six movie theaters, and at least a dozen cafes and restaurants. When we want to venture beyond our quartier, we take the metro. For 1.10 euro, we can go anywhere in the city.
Other things in Paris can be cheap, too--for example, telephone, cable, and Internet. Our phone plan, which costs less than 40 euro per month, allows unlimited free calls anytime to anywhere in the United States and anywhere throughout Europe. Hard to beat. Full cable and wireless Internet service cost, in total, less than 70 euro monthly....
In Paris, we pay for heat maybe six months a year. In Panama City, we'll pay for air conditioning year-round.
Groceries are more expensive in Paris, but not dramatically so.
... For our family, given our lifestyle and what's important to us, day-to-day living costs in Panama City will be slightly more expensive than in Paris.
(speaking to the cost of housing)
In Paris, you could spend as much as 15,000 euro per square meter to buy an apartment in one of the city's prime neighborhoods and 8,000 euro per month or more to rent one.
You could also buy or rent for considerably less, of course. It depends on what kind of apartment you're in the market for and in which arrondissement you'd like it to be located.
And this is the fundamental point to remember, not only in Paris, but in Panama City...and anywhere.
*****
Figaro, 30 April 2008
Searching for a Paris apartment gets complicated when the French are not home to show what they have on offer:
Advice: Always consult with PREF before setting dates to come to Paris to search.
*****
Strong Numbers for the Paris Real Estate Market 2007 Says New Report |
NewswireToday - /newswire/ - Paris, France, 04/25/2008 - The U.S subprime disaster severely hit the European financial sector but the crisis had no negative impact on the Paris real estate market until the end of 2007. |
|||
In a press conference on 1st April 2008, the Paris Notary Chamber published its market report for 2007 and once again presented strong numbers. The official average price per square meter for unoccupied old apartments in Paris rose by 2.7% between the 3rd and 4th quarter 2007 and by an impressing 10.5% in comparison with the 4th quarter 2006. The average price per square meter in “Paris Intramuros” was 6,360 €/ US$ 10,145.3 during the 4th quarter 2007 and 36,807 properties were sold in 2007 |
|||
*****
Excerpted from Internet French Property 15 April 2008
[French] House Prices Drop By 1.9%
House prices went down by 1.9% in the first quarter of 2008, but a crash is unlikely, say French estate agents.
Most of the drop occurred in March, when house prices went down by 1.6%. By contrast, the price of apartments remained stable over the quarter, and actually rose in March…Much of this overall increase can be attributed to price rises in Paris and the South East. By constrast, in the South West prices have barely moved over the past two years.
The agents take the view that credit conditions in France remain favourable, and that the overall economic outlook is broadly favourable. They also consider that there remains a sizeable underlying demand for housing.
It is also important to note that the level of accumumulated household debt that characterises many Anglo-Saxon countries is not something that is a feature of the French economy. In France, mortgages are based strictly on income levels, where they are capped at a maximum of one-third of household debt.
It will be interesting to see the figures that eventually emerge from INSEE, the national statistical office, whose base is larger than that of FNAIM, and who might be expected to have less of an axe to grind. The problem with their figures is that they are several months behind the market, so do not give a precise picture of current trends.
However, it would be a mistake to consider that prices throughout France are on the slide. Particularly in the City of Paris and the South East prices continue to rise, albeit at a modest rate.
As the following table shows, there are also hotspots in various parts of the country.
Table: Property Prices
City/Town Price m² % Var 07/08
Aix en Provence €4222 +6.1%
Marseille €2996 -0.6%
Paris €6342 +5.6%
Source: FNAIM Apr 08
As always with such tables, you should take them as a general guide only, as the value of an individual property will depend on, inter alia, location, condition, and size.
Four Banks Suspected of Collusion Over Mortgage Rates
Four French banks are suspected of colluding to fix mortgage rates, in an investigation being undertaken by the French trading standards authority.
The banks concerned are: Banque Populaire, Caisse d'Epargne, Crédit Agricole and Crédit Mutuel.
French newspaper reports suggest that at least two regional offices (Brittany and Centre) of these banks set up a ‘non-aggression pact’ to limit competition in the purchase of mortgages held by their existing clients.
An existing mortgagee seeking to improve their mortgage rate with another bank would find that the rate they were offered by the bank to purchase the debt was no better than their existing lender.
Reports suggest that the practice was taking place during 2005/6, when mortgage rates were declining, and borrowers stuck on a fixed rate could see the possibility of obtaining a new loan on more advantageous terms.
Whilst most French banks often apply early redemption fees, there are normally repayment windows available when the loan can be redeemed at no additional cost.
In order to fully investigate the allegations, officials from the Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) swooped on bank offices and removed documents and computer records belonging to several senior bank officials.
There has been very little public response from the banks involved, no doubt most embarrassed that the investigation has leaked out.
This is not the first time that French banks have been involved in a mortgage rate-fixing scandal. Seven years ago, no less than nine French banks were found guilty of colluding on mortgage rates in the early 1990s, resulting in a record breaking fine of €175m.
At the time, the banks acknowledged that the practice of renegotiating mortgages with other lenders was costing them several million francs a year.
Someone taking out a mortgage with a bank is likely to remain a customer all their life, and in transferring a mortgage to a competitor, the lender risks losing not only the loan, but the bank account operated by the borrower.
*****
Le Figaro Interview with Jean Garcia, President of Belimmo Realty:
Do you agree with the severe conclusions of the public report on the real estate professions?
The problem is that real estate agents create real estate agents, and it is not enough to conclude a sale or two to open an agency. I concur with the report that holds that 75% of people in real estate respect neither the law nor the ethics of the profession. [italics added] However, these black sheep, the "cockroaches of real estate,” motivated by the “bait” of profit, tarnish the image of the whole profession. Whereas the heart of our profession, is service and respect of our customers as well as a respect for the value of their property.
*****
PREF's Association with a Licensed Realtor
Because PREF represents only potential buyers searching for properties in Paris, we have not been able in the past to assist owners who want to sell their properties. However, we have now established a relationship with M. Colin Allongue, who is a licensed Parisian real estate agent and who is available to assist owners to sell their properties.
We met M. Allongue during a difficult search for a former client and were very impressed by his straightforward manner, his efficacy and professionalism and his personal friendliness and genuine attention to his client's interests. We have established an informal relationship with him on behalf of our clients who want to sell their apartments and are happy to refer inquiries to him.
M. Allongue has been active as a realtor in Paris for the past 15 years and works for his own account; thus is an independent broker and not affiliated with any agency. He can be reached directly at 01.45.27.51.58 or by email at allonguecolin@orange.fr.
Consistent with PREF's stated policy, we do not share in any commission or remuneration that M. Allongue receives from his sales. We remain buyer's representatives.
*****
Paris Real Estate Named Best Investment
Paris once again leads this year’s list of top real estate investment markets in Europe, according to the highly regarded real estate investment report, Emerging Trends in Real Estate(R) Europe 2007, just published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP. Paris rates highly for both total return prospects and low risk, and thus its risk-adjusted total return prospects are the best in Europe.
Survey respondents point to the city’s economic stability and sustainability — in addition to its status as a global gateway — as major reasons for its top ranking as an investment market. Ample urban regeneration and redevelopment opportunities also attract investors, notes the report, released today at ULI Europe’s European Property Development and Investment Conference in Paris. As a top market for the past several years, “Paris still has good prospects for the next two years,” the report says.
Paris is a favorite among those looking to buy property as well; about 54 percent of the respondents recommend buying office space in Paris, 57 percent recommend buying retail, and 41 percent recommend buying industrial/distribution properties.
*****
PREF in The New York Times again exactly one year later!
You'll Always Have Paris ... an article, featuring PREF clients from Rochester, MN who blew into Paris and bought an apartment in less than four hours! read the full article at the NYT web site...
That would be where, exactly? And how much did it cost again?
“It happened so fast,” said Deviyani Nautiyal, sounding surprised even several months later as she recounted a hunt that began at home, in front of a computer. “I can't believe we bought an apartment within four hours of landing.”
Another excerpt from the article...
It also has patches that are not so wonderful — the Avenue de Clichy comes to mind — and some that are elegant indeed. C. Randolph Fishburn, a lawyer in New York who frequently works in Paris, paid 1.1 million euros last year for a central-casting two-bedroom, two-bathroom apartment on the stately Avenue de Wagram: 1,400 renovated square feet in a 19th-century building "across from the only 24-hour flower shop in Paris," he said. He added that the florist also stocks Champagne — presumably in case of emergencies. Mr. Fishburn said he "realized the market is undervalued and I could do this as investment and a euro hedge."
Closing costs were high but carrying costs — property taxes and maintenance fees — are not, and his mortgage rate is below 4 percent. That's lower than this season's high heels.”
Another excerpt from the article... (we talked the reporter out of featuring the 14eme in favor of the 17eme — more properties and more demand):
More from the article...
And more...
Read the full article at the NYT web site.
*****
PREF in The New York Times
In Paris, Romancing the Deal ... an article, featuring several PREF clients, appeared in the New York Times' Home & Garden section.
Another excerpt from the article ...
"Bilingual and versed in currency trading, mortgage rates and property taxes, services like Paris Real Estate Finders feed the fantasies of Americans locked in their Dilbertian cubicles by sending them links to Web pages lush with descriptive prose and seductive photographs. In true American spirit, they offer efficiency, too. No more slogging from listing to listing in a city where each microneighborhood has its own microagency. No more translating phrases like 'poutres exposés' ('exposed beams').”
More excerpts from the article ...
"Doing business in a foreign
language is only one of the challenges. Closings are typically two-hour rituals that can include a dramatic reading of a 30-page
property transfer document. It's 'a holdover from the Revolution, when people with limited education began buying houses,' explained
Dr. Edward Wheatley, an American professor who bought an apartment in an Art Deco building with his wife, Mary Mackay, through Paris Real Estate Finders."
"For
some buyers the fluctuating euro (trading this week for about $1.20),
continues to have a chilling effect, said Darrell Halverson, who
runs Paris Real Estate Finders with his wife, Stephanie Freedman.
But with French mortgage rates still around 3 percent and the market
'marching up steadily, 1 percent a month for 40 months,' he noted,
many 'are
poised and ready to leap.'
"Toward that end, Finders has compiled
not only a sophisticated database of listings but also a rapid
response mechanism that can shoot the right ones to browsers who
fill out a short questionnaire at the company's Web site."
"The firm
charges about 2.5 percent of the selling price for help with various
aspects of finding and financing a property. They deal with one
client at a time and say they had more business last year than
they could handle. …"
"But for those who have found their dream pied-à-terre,
economic cycles, the bureaucracy and taxes are beside the point.
It's satisfying to know 'you can negotiate your way through a different
legal and cultural system to make a home for yourself in another
country,' Dr. Wheatley said. Right now he and his wife are busy
preparing to move from Clinton, N.Y., to Chicago. But they say
they are delighted to know that one day, when the rat race ends,
'the place is going to be there when we can use it more freely.'" read
the full article at the NYT web site...
*****
Getting Unengaged
In a small number of situations, we have found that we are unable to work effectively with a client. This may be because the client is unrealistic about the market relative to their budget, or has unrealistic requirements for an apartment, or for other reasons, we are not able to effectively represent the client's interest. Because we count on having a cordial and positive relationship with our clients, in the situation where this is not the case, we reserve the option to refund fees paid in whole or in part and withdraw from the engagement. We emphasize that this would be an exceptional circumstance. Since our success depends on us trusting and communicating well with our clients and that trust and confidence being reciprocal, when this does not exist, it is in both our and the client's interest to end the relationship.
*****
After I buy, What Next?
We often have questions from our clients about renovation and management services. While we do not directly handle either of these aspects of ownership any more, we do work closely with people in whom we have confidence and who we will recommend without hesitation. (Other questions and answers appear on our FAQ page.)
It is important to understand in advance that we work with small, individual enterprises. They are much in demand and often there are delays in setting up renovation projects. So it is important to be patient and organized when undertaking renovations. On the positive side, the craftsmen and enterprises with whom we collaborate are honest, reliable, guarantee their efforts and do high quality work.
We can assist you with all elements of renovation, including architectural services, plumbing and electrical, painting and plastering, carpentry, kitchen installation and decoration. The range of services can be adapted to your preferences -- from individual services to "turn-key" operation.
To give you an example of some of our regular renovation "associates", you can contact the following:
Caulaincourt Cuisines: contacts@caulaincourtcuisines. Supplier of Nolte Kitchens.
Paul and Victoria: Decoration--Furnishing: pauletvictoria@yahoo.fr
*****
Flash on the state of the Parisian real estate market in the past year
Paris real estate prices, reflecting the same trend throughout
France, have continued to rise in the past months. Depending on
the neighborhood, the increases range from 12.3% to 20%. According
to data maintained by the Paris Notaires, the average price of
older apartments is at a record high of 4,139 per m2 According
to Nexity, a major developer of new construction, new apartments
average 6,650 per m2 in the capitol.
The question posed relentlessly by professionals is whether this phenomenon is speculative and therefore subject to a major correction or a crash. Analysts consider that there are a number of factors at play, including interest rate movement in the next year, the effect of increases in the price of oil, other world economic and geopolitical factors as well as unemployment in France. Economists note that, despite price levels having reached the levels they attained in 1990 (preceding the collapse of 1981-1995), the market appears to be well balanced and not at risk of crashing. Interest rates in France remain very low; averaging 4.5% for a 15 year, fixed rate loan and 3.65% for a comparable variable rate loan. Mandatory mortgage insurance typically adds 1% to these rates.
It is our opinion that buyers who buy wisely with financing appropriate for the property can still expect to realize a fair return on their investment. However, we caution our clients to take into consideration the market conditions described above. Information in this summary is based on data taken from le Nouvel Observateur, August 2004.
PREF Advises Caution in Non-Notaire Transactions
We understand that people consult us and may choose, for their
own reasons, not to engage with us. From time to time, we do have follow-up
from such individuals.
In a recent case, we were contacted by someone (with whom we had previous contact and informally advised) who chose to use a (40% more expensive!) realtor for his search for a small apartment. In talking further with him, we learned that he had made almost all the classic mistakes that French buyers know not to make. He signed his "contract" without the assistance of a notaire, gave a 10% down payment check to the realtor, ostensibly payable to a notaire whom he had never seen and he failed to get the minimum documentation required and provided by French law--the certificate of the "loi Carrez", and the termite, lead and asbestos inspections. Nor did his realtor explain to him the exact methodology for exercising his 7-day withdrawal rights.
Since we really can't assist or protect people who don't engage us, we do offer the following simple advice:
- Hire your own notaire/legal representative before signing anything with anyone. This is a basic rule dictated by common sense, whether you are engaging in a legal transaction in France or in your own country. Sometimes, French will buy using a "shared" notaire who represents both parties. However, it is most common for each party to have a separate notaire and we believe it is an essential protection for foreign buyers.
- Do not give a check to anyone, either the seller or his agent to be applied to a transaction until you have been advised to do so by your notaire. The notaires receive funds on behalf of the seller and they are placed in a secure client's trust fund, closely supervised and guaranteed. Any other approach leaves you open to loss of your funds.
- You have an absolute right to withdraw within 7 days of signing a promesse de vente. The Parisian notaires use a "unilateral promesse de vente" which irrevocably commits the seller, but leaves the buyer the right to withdraw under certain conditions. Be sure you understand your rights and how to exercise them. Promesse de vente: A contract to buy real estate prepared by the Notaire. Upon signing, one is generally obligated to deposit 5-10% of the agreed upon purchase price.
- 4. Prior to signing the promesse de vente, the law requires that you be given a certificate attesting to the measured surface of the apartment (the "loi Carrez"), as well as termite, lead and asbestos inspections. These are the most basic protections that you have as to the structural soundness of the building. Committing to a purchase without obtaining these could put your investment at significant risk.
*****
La Seine? Dipping your toes in the Seine or "Paris Under Water"
It's well known that no one swims in the Seine, unless by accident or desperation. However, potential buyers who believe they have to be close to the Seine may find themselves closer than intended.
For several years, hydrologists, geologists and urban planners
have been warning of the imminent potential of a catastrophic flood
in Paris that would equal or surpass the historic flood of 1910.
Known as the "centennial high water," the feared flood
would eliminate all but 4 metro lines, paralyze the city for weeks,
and cause between 10 and 20 billion euros in damage.
Historians know what realtors often neglect to point out: the most affected areas are those closest to the Seine. Historic buildings are often the most fragile in terms of structural integrity. During the flood of 1910, waters reached as far as Gare St. Lazare. Hard to imagine, but scientists today believe that the question of such a flood is not whether, but when.
We suggest that potential buyers take this little-publicized potential into account in making their investment decisions.
*****