The wealthiest individuals in the world invest about 9% of their wealth in real estate. With London topping the chart as their preferred city, Paris is not so far behind with 5th place in a new study by Wealth X. The super-rich agree, Paris real estate is a worthy investment.

More wealthy individuals, more high-end property sales

Real estate network Barnes and American firm Wealth X presented a study last month to determine the most desirable cities in which the wealthy buy high end homes. They identified 212,615 households in the world with assets of more than 30 million dollars (28.2 million euros), compared to the 100,000 identified in 1995. Of the combined fortune of these households, 8.9% was placed in high-end real estate. And 10% of the super-rich, some 21,000 households, own at least five residences.

Paris Property Group’s Kathryn Brown explains why real estate is a great hedge in uncertain times, “Even at the height of a crisis, the real estate market doesn’t collapse. The stock market might drop significantly but Paris real estate is fairly recession-proof because property in the historic center is extremely limited – and Paris is a top destination.”

Ultra High Net Worth Individuals (UHNWI) are expected to number over 300,000 by 2020. A population that is not limited to those with inherited fortunes: 64% have started their own business and manage their real estate like they do their business. They know how to arbitrate, gauge taxation and the stability of the countries where they buy.

The top 5 cities where the super-rich buy property

London is first among cities that attract the “super-rich”. Average prices there exceed 35,000 euros per square meter – and that’s even after a 15 to 20% decrease over the last year, partly due to the Duty Stamp (a 13% tax on non-residents) and Brexit. In places like London, Switzerland, Australia and Vancouver, which are faced with an influx of real estate investors, the authorities are setting up fiscal barriers to prevent the “super-rich” from buying properties that remain empty most of the year.

New York took second place, despite its market being a little frozen due to the presidential campaign. Supply exceeds demand, and properties often sell below asking price. Even with a 10% discount, prices reach over 70,000 euros per square meter in the most luxurious buildings, and are around 15,000 to 20,000 for the “low end” segment. Over a thousand transactions exceed 5 million euros every year.

Paris as popular as ever

Behind Tokyo and Sydney, Paris firmly holds its place in the top 5. The city has a very different market from the first four, with around a hundred transactions exceeding 4 million euros every year, but very few are over 7 million. Indeed, the most beautiful city in the world is not a prime location for skyscrapers with their spas, restaurants, cinemas and the like. Condominiums are too small to bear such costs. But its smaller scale is what makes the city beautiful. One notable exception is the 24 townhouses at 140, rue de Grenelle, which are almost all sold. The only one of its kind in the capital, the complex is secured, discreet, modern and equipped with all the high-end services.

Neither the attacks nor the recent assaults on celebrities seem to frighten foreign investors in Paris, whose numbers increase with the value of property. At Barnes, these non-French buyers represent 45% of the clientele buying properties over 4 million euros. There are also many French nationals living in London who are returning to Paris.

Paris Property Group assists high net worth individuals in finding excellent properties that serve as both pied-a-terre and as a wise investment.  Contact@ParisPropertyGroup.com to learn more.

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Photo: Zinneke