Luxury property in London is sold more frequently than in Paris. Although French capital is around 4 times smaller in terms of population (8.6ml in London vs. 2.2ml in Paris), London has been its rival for long centuries. Two of the largest Western European metropolis have much in common. But when it comes to real estate, these two cities stick to very different development paths. Sales in the upper segment of the real estate market rose by 121% from December 2005 to June 2015 in London, while the identical mark in Paris is estimated at just 60%.
According to market analysts, this difference is explained by the fact that London demonstrates way more impressive results in terms of business and economy development: the city generates approximately 23% of the country’s annual GDP. London is often seen as a haven for capital for wealthy people from around the world, and Paris is a no match to England’s capital in this regard, which is confirmed by a variety of factors. English is a recognised international language, a high concentration of financial institutions in the United Kingdom and the tax status of ‘non-residents’ are attracted to the British capital paid professionals and successful businessmen from different countries.
However, the introduction of stamp duty in December, 2014 has made the purchase of the houses in London even more costly. A slowing economic growth in China and the decline in oil prices has led to some reduction in demand for prime London real estate from foreign buyers as reported by numerous respected conveyance solicitors agencies. As a result, the amount of acquisitions in the most expensive districts like Knightsbridge, Belgravia or Mayfair is gradually reducing. In October, the agency Knight Frank has reduced the growth forecast for the elite of London property market for 2016 from 4.5% to 2%.
Savills agency analysts say London prices for elite real estate are reaching the maximum. At the same time, elite real estate in Paris still has potential for appreciation. An increase in pricing for the most expensive real estate objects in French capital has stopped after the victory of Francois Hollande in the presidential elections and the introduction of the wealth tax. Today, the cases when unique historical houses for sale do not find their buyers are quite frequent. The total volume of transactions has declined in 2012.
What can you expect in the future? In Paris, the negative impact on the real estate market is provided by the laws governing the procedures of renting apartments and houses. The vast majority of property owners in the capital – the French, do not appreciate the restrictions on their property. In London, foreign players in the real estate market are big players in the market. Given the fact that the number of dollar millionaires and billionaires in developing countries is growing much faster than in Europe and the US, we can predict an increase in demand for the elite property in London.