The old and nouveau
When the top end of the market emerges from the doldrums, which capital will come out on top — London or Paris?
By Kasia Maciejowska
The best homes in Paris — from those with swirling Art Nouveau ceilings to those with Modernist glass walls — are seducing the world’s wealthy again, after a lull in demand last year. But while the London market for the finest homes came to an abrupt halt in 2008, in Paris the changes were less rapid. Now both markets are picking up as the wealthy brave the market again. But which of the cities will win over those after a landmark address and the best lifestyle that money can buy?
Savills, the international agent, has reported that the number of apartments on sale in Paris was down 39 per cent in the first quarter of this year. But Alexander Kraft, chairman and chief executive of Sotheby’s International Realty France, says his firm’s books have been filling with alluring properties since May. The market mood last month was more akin to that in early 2008, before the property crash, he reports, and in the past four weeks the firm’s Paris office has sold four properties worth at least €10 million (£8.6 million).
This apparent new wealth of stock is in contrast to London, where prices have been rising for four months, driven by a lack of homes for sale. Liam Bailey, head of residential research at Knight Frank, says that Paris may be merely experiencing a delayed reaction to world economic woes — and that prices in Paris may go the way of those in London, which until a year ago was being fêted as the preferred home of the super-rich. He says: “People now think that London may be the first city in Europe to come out of the recession.”
For now, both markets are heavily reliant on wealth from international buyers — and Bailey and Kraft agree that the most notable new trend from the downturn is the range of nationalities looking in Paris and London. At the top end, up to 90 per cent of buyers are from overseas. Although the dollar and rouble still dominate, interest from Chinese and Indian buyers — who were barely active before the downturn — has materialised.
The weakness of the pound has obliterated the number of mid-market British buyers wanting a pied-à-terre in the French capital — but the recession has been good for Parisian buyers, who previously felt that prices were inflated. “Price falls of between 10 and 25 per cent have meant that more French buyers have come into the Parisian market,” Kraft says. Enthusiasm from wealthier Brits has been barely dampened — such buyers make up the third largest group in Paris, in the €5-€30 million market.
Both local and foreign buyers have been enlightened by the recession in one regard: they are now obsessed with quality — but want it at low cost. This is producing disappointment in some cases. Kraft says: “Buyers feel they can take their time to negotiate offers, but buildings with elegant, Haussmannian architecture are always the most wanted. Some have romantic interiors and some have a modern style inside, but the traditional Parisian apartment building has longstanding appeal.”
A look at Sotheby’s books gives the impression that buyers who can afford quality are spoilt for choice in Paris. An array of opulent-looking traditional apartments contrasts with modern designer pads — next to the Louvre, atop Montmartre, by the Seine and opening on to parks. The homes are fabulous on the inside and also have prime views.
A whole house in Paris is an unusual prize, given the continental love of lateral living. The house pictured, in the super-smart 16th arrondissement (between the Champs Élysées and the Bois de Boulogne) has been on the market for six months. It is in a large, private garden and was built in 2000. It has seven bedrooms, multiple terraces, a lift, high security and underground parking — with a carwash. The price is available only on request: Savills International says that prices in this arrondissement dropped by 2 per cent in the year to March 2009, but this is likely to have a marginal effect on such a rare property.
The modern sitting room with views over the city from Montmartre, pictured, is in a five-storey house. It has a basement swimming pool and spa, a cinema, a children’s or guest floor, a master bedroom floor and a living floor — all accessible by lift. The asking price is €9.9 million and it has been for sale for six months. Kraft says that this is not long for homes of this value. The outstanding Belle Epoque apartment, pictured above right, is for sale at “offers over €5 million”. It has three bedrooms and is in the 16th arrondissement, but has been on the market for more than year.
There are price reductions to be found in Paris, even in this sector of the market. A two-bedroom, fifth-floor apartment overlooking the Louvre has been reduced from €3.9 million to €3.5 million because the owners are keen to sell. It is minimal and modern inside, making the views of the 17th-century palace from the five living room windows even more impressive. Prices in the 1st arrondisement have risen by 2 per cent since 2008, Savills International says, so such a reduced purchase is a gem.
Paris remains top of its specialist area: quality of life. Knight Frank’s report declares it the second best city in the world for this elusive trait after Toronto. If the recession calms buyers’ desire to inhabit the world’s fastest cities — London and New York — the appeal of a slower pace of life in Paris may grow. If the French capital can escape the sharp downturn endured by London, it may find it has achieved permanent ascendancy.
Source Reference:
http://property.timesonline.co.uk/tol/life_and_style/property/investment/article6733719.ece
