French Property Insider, Paris France -- A weekly e-letter sharing insights, recommendations, tips, and discoveries about property in both Paris and France.

Click Here for Upcoming Living and Investing in France Conferences!

French Property Insider
View of the Eiffel Tower from the First Floor on Avenue Bosquet, 7th

Buying on the Bounce Back

French Property Insider

Volume VIII, Issue 21
May 27, 2010
Paris, France
http://adrianleeds.com/frenchproperty/insider

Subscribe your friends to French Property Insider...it's FREE!

This is Your Lucky Day...Be One of a Lucky 13!
An exclusive offer to our readers...

On June 5th, 2010, the price of the eight remaining shares of the city's most beautiful fractional ownership property, "Le Palace des Vosges," are going to increase by about 20% -- more than 30,000€...

This offer is open to our readers only. To qualify, all you have to do to become an owner is send us a signed purchase contract and proof that your deposit has been transferred to the escrow account. This guarantees your share at the current price for a luxurious two-bedroom/two-and-a-half bath apartment in the Place des Vosges, Paris, France, 4th arrondissement.

To learn more about Le Palace des Vosges and see photos, or for more information, visit http://www.palacedesvosges.com

Bonjour French Property Insider Subscriber,

Moments sitting on the Métro or waiting for the "plat du jour" to arrive at a café, I read things like "The Wealth Report 2010" published by Citi Private Bank and Knight Frank to try to have a view of the French property market from a more global perspective.

In this report, there was one particular prediction we find very much coming true and I realized how misguided we can be if depending too much on the past to set the path for the future. The excerpt was this:

Future considerations

Last year we posed a question: was the downturn leading to a simple re-pricing of assets that had become overvalued, or something more fundamental occurring in the global economy that would mean prime market pricing would be further suppressed and take a long time to recover?

To provide an answer we pointed to the emerging evidence in London – a city at the epicenter of the downturn – where we were beginning to see wealthy buyers return to the market.

We suggested that while no market could escape a bubble-and-bust scenario, the evidence was building that when the market believed that prices had returned to offering good value, activity would rise and the perennial factors that made a prime market desirable would endure. Namely, limited supply, the growth of demand in line with the expansion of global wealth and the clustering of the wealthy in established markets.

This is exactly what happened. Supply fell in London and also in countless other markets where affluent owners or top-end property developers decided to refrain from selling at new lower prices. Demand then rose as buyers looked hopefully, but often in vain, to secure stock at bargain prices. As we have seen, those markets that appeared to be on the verge of collapse a year ago have bounced back from the ravages of the credit crunch.

The issue for 2010 is how secure the renewed bounce in pricing is in the markets at the top of our table.* Our view is that most prime markets are suffering from an undersupply of stock and this will help maintain prices in the short term. Looking further ahead, however, it is those locations that offer a genuine lifestyle attraction to the world’s wealthy, rather than just an investment opportunity, that will prove most sustainable.

*Top of our table

If you were to look at the French property market statistics provided by the Chambre de Notaires, compiled by the INSEE (French National Institute for Statistics and Economic Studies), you would be led into believing that prices are down -- at least in Paris alone at the end of 2009, the average price of property was down by 3.9%.

Notes:

For Paris and Ile-de-France property prices, click here.

For the report on all regions of France, click here for a pdf version and click here for another good online resource.

When you read the price statistics, be sure you understand that the figures are not only out of date, but can be grossly skewed. Normally the statistics are released about 2.5 months after the closing of the quarter. Given that the properties to which the statistics relate were purchased about three months earlier than the deeds were recorded (the time between the signing of the Promesse/Compromis de Vente and the Acte de Vente), you can assume then, that these figures are already out of date by more than five months.

Other factors that contribute to a variance are:

1) the reduction in the recorded purchase price, which can be attributed to direct payments made to the sales agent (agency commissions) to help reduce transfer taxes and notarial fees;

2) the listing of inventory of fixed furnishings such as built-ins and appliances, etc...;

3) the 'under-the-table' cash transactions, which are illegal but do occur;

4) and finally, the figures are diluted as they are reported by an arrondissement in its entirety and do not account for differences by neighborhoods or quality of properties.

We know for a fact that the actual market values can be considerably different than those the Chambre de Notaires report based on property searches we perform daily and how those compare with these reported prices.

As the Wealth Report suggests, owners refrained from selling at the reported low prices and Paris in particular is suffering from an undersupply of stock. The international buyers demand is building as "low savings rates have encouraged the wealthy to move investments out of cash and into property in the search for acceptable yields. This has driven demand for property higher and, set against tight supply, has served to push values upwards in many locations."

The 'bottom line' is that you won't see negative figures on the price charts again for a long time, particularly in Paris and in most other parts of France. That makes now a great time to make a purchase, coupled with low interest rates and a weakening euro.

But be prepared to make compromises on what might now seem like 'the perfect property.' We have one such buyer who is compromising on a first floor location (she prefers high levels) for a view of the Eiffel Tower, knowing that the property will greatly appreciate in a short amount of time, rent well and yield good results...at any level.

If prices begin again to trend about 10% annually, not at all unthinkable, then within five years, the apartment will be worth two-thirds more and her biggest problem will be the 33.3% capital gains tax she'll pay, still leaving her with a profit of almost .5 million euros, or an almost 50% return on investment, not to include rental revenues and her own enjoyment of the property.

If you ask me, paying taxes is a good problem to have.

A bientôt,

Adrian Leeds
Editor, French Property Insider
Email: fpi@adrianleeds.com

French Property Insider

P.S. Have a look at our newest luxury apartment in the Parler Paris Apartments offerings! Located on rue Buci in the heart of Saint-Germain-des-Prés, this all newly renovated large studio makes a perfect haven after busy days shopping in the district or hanging out at Café de Flore! Visit Le Buci at parlerparis/apartments/rentals/buci.html

P.P.S. Scroll down to learn more about the upcoming International Living Live & Invest Overseas Conference, September 16-18, 2010 in Las Vegas, Nevada. I'll be speaking there on the subject of France, of course(!), and then in other locations on the West Coast, including at the Alliance Française San Francisco on September 22nd. Stay tuned for more information and make your plans now to attend.

***"Settling Down in Paris" - Episode HHINT-402
Tune In:
June 6, 2010
12:30 PM ET/PT
House Hunters International Episode HHINT-402

To learn more, visit AdrianLeeds.com or email Adrian Leeds, at adrian@adrianleeds.com

SEEKING A MORTGAGE IN FRANCE?

French Property Insider When you make a purchase as important as a piece of real estate in a foreign country, you ant to know that you can trust the people you are dealing with. Adrian Leeds has developed a network of professionals that meet only the highest of standards. With the expertise and experience of Adrian and her team, you can depend on getting the best advice and support to feel completely confident that you are making an informed investment decision.

Let us help you secure a mortgage in France at a competitive interest rate. Visit www.adrianleeds.com/frenchproperty/loan for more information or contact Loan@AdrianLeeds.com

This Time Next Year, You Could be Living Your Dream...

Live & Invest Overseas
September 16-18, 2010
Las Vegas, Nevada

If money were no object, what would your dream retirement look like? This fall, let International Living show you where you can make that dream your reality… for as little as $649 a month. Maybe you long for your own cottage on a quiet beach… a grand apartment in a city vibrant with concerts and cafes...a mountain villa where the air is crisp… or even your own vineyard amid gently rolling hills.

French Property Insider Whatever you fantasize about... come with that idea in mind. We’ll show you the places in the world today where you can live your dream, for a small fraction of what you’d pay for a comparable life at home.

Adrian Leeds will be a guest speaker at the Live & Invest Overseas Conference on "Living the Dream to Live in France"

Click here to learn more and register!

New! Introducing...Le Buci.

In the heart of Saint-Germain-des-Prés, Le Buci is in the perfect location to enjoy one of Paris’ most sought after locations.

Home to a number of famous cafés, such as Les Deux Magots, Brasserie Lipp and Café de Flore, and designer shops are within steps of the apartment -- Louis Vuitton, Dior, Armani and Sonya Rykiel, to name just a few.

And this newly renovated apartment is every bit as stylish as its surroundings with modern and elegant fixtures, luxurious fabrics and every amenity you’ll need…

To check availability, visit Le Buci. http://www.adrianleeds.com/parlerparis/apartments/rentals/buci.html

All Parler Paris Apartments are luxurious and well-located with attention to every detail, to make your stay in the City of Light as comfortable and enjoyable as possible. To view all apartments, visit the Parler Paris Apartments site or email us at apartments@adrianleeds.com.

Watch us on House Hunters International...

***"Settling Down in Paris" - Episode HHINT-402
Tune In:
June 6, 2010
12:30 PM ET/PT
House Hunters International Episode HHINT-402

To learn more, visit AdrianLeeds.com or email Adrian Leeds, at adrian@adrianleeds.com

Helpful Conversions for Real Estate

1 square meter = 10.7639104 square feet
1 hectare = 2.4710538 acres
For more conversions, refer to: www.onlineconversion.com/

Take the Risk Out of Currency Conversion

If you’re buying a holiday home or investment property overseas, when you trade your currency is crucial. The euro exchange rate is constantly fluctuating, so trading at the right time will mean your money goes a lot further. Adrian Leeds Group LLC and Moneycorp are working together to ensure you make the most of your Dollar or Sterling when buying a property in France.

For the latest exchange rate use our currency converter at http://www.adrianleeds.com/frenchproperty/loan/moneycorpconvertor and learn more about moneycorp ere:
http://www.moneycorp.com/affiliates/microsite/index.cfm?agentid=10168408.

Practice Your French...or English!
Parler Parlor French-English Conversation Group

Practice speaking French and English. Make friends, discuss interesting topics, learn about other cultures, progress in understanding and speaking, naturally and easily. Meets three times a week -- come as often as you like!

For further details, visit Parler Parlor

Subscribe to the Parler Paris Nouvellettre®...It's twice-weekly and it's FREE! Visit Parler Paris to learn more and subscribe.