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Investir à Paris ou à Londres? Oui ou non et où
Where next for property prices in Paris and London? Recent data remains broadly encouraging in both capitals, with international investors still showing buying appetite and driving demand and prices, but expert views of the outlook are more mixed.
Foreign purchasers invested more than £5.2bn in London last year (£1.5bn more than in 2010) with certain postcodes in particular proving popular. More than 64 different nationalities continued to look to London, and sterling-based property assets, as a safe haven in difficult times. Overseas buyers accounted for nearly 60% of purchases in prime central London property in the 12 months to April 2012. A similar effect has been seen in the Paris market, in which Italian buyers in particular have been active in 2011, accounting for nearly 25 % of all ‘high-end’ purchases, generally viewed as those with a sale price in excess of 2 million Euros.
The most expensive areas in each city are unlikely to come as a surprise. The top 5 in London ( prices in excess of £1,000 per sq ft) are generally considered to be W1, SW1, SW7, SW3 and W8, with SW7 topping the bill at £1,340 per sq ft. The top Paris arrondissements ( prices above 10,000 euros per sqm ) remain the 6th, the 7th, the 4th, the 5th and the 1st, with the 6th showing 12,400 euros per sqm and perhaps as much as 13,100 euros per sqm according to some sources.
But will the current top performers still be the stars of tomorrow? In terms of capital growth in London, W2 and W9 have both delivered capital growth in excess of 150% over the last 10 years (as too have W1 and SW7), but both remain some 30%-40% cheaper than SW7 in terms of price per sq ft. The most recent market statistics emerging from Paris suggest strong year-on-year growth of 8%-10% in the usual suspects, but also indicate similar growth in the 11th, the 18th, and the 13th. Even more recent quarterly data to the beginning of May 2012 suggest price slippage in the 1st, continuing growth in the 4th, 5th, 6th and 7th, but with the 18th, 19th and 20th then being among the better performers.
So, follow the foreign money into the ‘right’ postcode or arrondissement, or try to spot the next star? The 18th is looking good in Paris , for example, and still only sells at around 7,200 euros per sqm. The 20th is even cheaper at some 6,900 euros per sqm. These are areas likely to be driven more by local buyers and may be less volatile than the current favourites of the foreign investors who could prove more fickle in a crisis. A similar logic applied to London would suggest that there must be a limit to the amount of Greek, Russian and Indian money that can be looking for a home and that the whole expensive bubble could be about to burst. Can Westminster carry on delivering the 32% capital growth said to have been seen in the last 3 years ? If not, why not try Clapham or Balham, both in the region of £460-£480 per sq ft and ‘only’ up by 85%-100% in the last 10 years, or Kentish Town (where the new French School has just opened), Islington or Highbury , slightly more expensive, but perhaps also still with further to go as impoverished Brits migrate from the foreign-dominated hotspots ?
Of course, you could also take the view that the best place for your money in current circumstances is under a nice, safe mattress and wait to see what happens to markets over the next 12-18 months. Most commentators seem to be looking for modest rises again this year, although expectations of 3% - 5% declines are not uncommon either. Few are as bad as the view that expects Euro meltdown and a 50 % price crash in London, but then who expected the financial crisis in 2008 ?
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