Last week, I wrote about the power of the “Leading Real Estate Companies of the World” network and their “Luxury Portfolio” high end division. They are our partners in the marketing and sale of upscale homes and estates all over the globe. Our counterpart in France is a firm by the name of FEAU,” Daniel Feau Conseil Immobilier” to be exact. They are to luxury Parisian real estate what Cartier is in the jewelry business. It can be said that they have their stamp on the most desirable and expensive apartments and mansions in and around Paris and they are the place to go for the fortunate few who want to buy them.
A few days ago, Charles-Marie Jottras, their President whom I have known for several years, sent me a study they just completed of the captivating high end market in Paris and the Western suburbs. I thought you would enjoy reading some of the findings. Perhaps you are looking to buy in Paris, or perhaps you just want to do some free “window shopping “…. Or maybe you are curious to know who the people who buy those multi-million dollars condos in the City of Lights are. Well, whatever your motive may be, enjoy!
The first thing that jumps at you at first glance is that the Paris market traits, as far as the buying demand, are pretty similar to what we are observing in other European capitals, like London, or in our own large metropolitan city centers, like New York, Miami, Los Angeles or the San Francisco Bay Area, to name a few. There are two kinds of buyers: the domestic buyers and the foreign buyers. They are not targeting the same real estate…Question of means. The foreign buyers now represent the lion’s share of the qualified demand, and the higher the price, the bigger the share. And you know what? At the very top of the price scale, it looks like we are competing for the same exact buyers!
Basically, the domestic demand in Paris is confined to a relatively small range, between roughly $1.5M and $3.5M, the entry level to what could be considered the high end in the region. Above $3.5, the large majority of the French buyers are out of the picture. Enter the foreigners… They are having a blast buying the crown jewels, right and left, up to $100M, or whatever. Who is counting? They buy beauty, they buy financial security (kind of), they buy in full ownership (which is not necessarily the case where they come from), they buy glamour and fame.
FEAU went as far as determining who, among the foreigners, was buying what and in what price range in Paris. Take a look at the findings of their study based on recent months and compare with your own big city market. I know that Paris, at this point, is ahead of the pack, but this will give us the flavor of things to come in our most desirable and very pricey US markets.
- European buyers (euro zone) represent, together, 13% of the foreign buyers in Paris. Just like the French locals, they are in the $1.5M to about $5M max and prefer the historic districts.
- The British (they are European too you might say, although they don’t admit to it) represent 10% of the buyers. They are shopping for the same goods mentioned above and in the same price range.
- The Swiss count for 15% of the sales (which was a big surprise to me) and they buy up to about $13M. Their economy is doing alright. They have quite a bit of the world’s money; maybe some of yours.
- Africans have an 8% share of the Paris luxury stock and buy also up to about $13M.
- The Middle East buyers represent 12% of the total. They start their shopping at roughly $10M and go up to $100 or so. Whatever it takes.
- We, Americans, together with our Canadian friends, account for 10% of the Paris buyers according to the study. We have more modest means. Our range is $2.5M to $6M, mostly in historic districts. Nostalgia.
- Brazil and the rest of South America is good for 4%. They spend up to $6M but want the money districts.
- The Russians absorb 20% of what’s offered and they want the best of the best, up to about $25M.
- Finally, the growing numbers of Chinese buyers represent today 8% of all buyers in the City of Lights. They too want the cream of the cream, at least what they can buy up to $13M.
That’s it. What do you want to buy? What’s your budget?