Better buy that quaint pied-a-terre on the Left Bank while you can still afford it.
Q&A: Paris charm or US bargains
Last Updated: June 10, 2011
Why are Paris prices going crazy? International buyers are tired of the roller coaster ride. They are looking for safe, stable places to stash their money and that means the old European capitals. London is popular as a financial centre, but Paris has its own charms.
Can Paris sustain these prices? Analysts think so. There is little new development in the city's most desirable neighbourhoods. And that means the finest apartments are attracting multiple offers, driving up prices.
Any other cities still seeing price increases? St Petersburg prices actually jumped 8.2 per cent in the first quarter of this year, after showing little movement in the first half of last year, according to Knight Frank. And Hong Kong prices are still going up, although not at the same rate. The city's prices rose only 6.4 per cent in the first quarter, even though they're up 15 per cent from a year ago.
Some analysts believe the best deals are found in the US, where prices are still dropping in many markets. Popular international cities such as Miami and Los Angeles have seen huge falls in recent years. But nobody knows if these markets have hit a bottom.
Are there any bargains in the world? XXX
Prices for luxury homes in Paris jumped 22 per cent in the 12 months to March this year, the biggest gain among the 15 cities tracked by the Knight Frank Prime Global Cities Index.
The City of Light has never been a bargain hunter's paradise, but "supply constraints" and growing interest from overseas buyers is driving up prices even more than normal, the property firm reports.
"Investors from Brazil, Russia, India and China are increasingly looking to Paris as a safe haven to invest funds in a mature and high-performing market," said Liam Bailey, the residential research director for Knight Frank.
In other words, it's starting to attract the type of activity already fuelling London's high-end neighbourhoods. London and Paris are starting to operate in their own rarified air, catering to wealthy buyers who are unconcerned by "affordability and macro-economics", the firm reports.
"These cities compete at a different level in attracting the world's wealthy elite," Mr Bailey said.
The price spurt in the European capitals is in sharp contrast to recent years when cities in Asia attracted headlines for gaudy price increases.
But government-enforced cooling measures are having an impact on Asia's markets, Knight Frank concludes.
Hong Kong, Shanghai, Beijing and Singapore posted an average annual price growth of 54.6 per cent in the first quarter last year, from 2009, compared with a more pedestrian 11.1 per cent in the first quarter of this year.
Other cities around the world are also struggling to find buyers, according to the Knight Frank index, which tracks high-end housing globally. Moscow was at the bottom of the list, posting an 8 per cent decline in the year to March.
New York, another city bolstered by international buyers, saw a scant 1 per cent increase.
But Knight Frank expects prices in Paris to continue to escalate.
Top 5: Hot cities
1 Paris, up 22%
1 Hong Kong, up 15%
1 Helsinki, up 12.2%
1 Shanghai, up 11%
1 Beijing, up 10%
Y-to-y price gain. Source: Knight Frank
An elite tier of global city markets is forming, "where the top addresses will become increasingly fought over by wealthy buyers" looking for long-term investments, Knight Frank reports.
The Quote: "An artist has no home in Europe - except in Paris." Friedrich Nietzsche
kbrass@thenational.ae
RESULTS
West Asia Premiership
Thursday
Jebel Ali Dragons 13-34 Dubai Exiles
Friday
Dubai Knights Eagles 16-27 Dubai Tigers
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
COMPANY%20PROFILE
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TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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UAE currency: the story behind the money in your pockets
THE SPECS
Range Rover Sport Autobiography Dynamic
Engine: 5.0-litre supercharged V8
Transmission: six-speed manual
Power: 518bhp
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Speed: 0-100kmh 5.3 seconds
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
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