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China buyers head for Paris market

CHINA homebuyers have started to arrive in Paris, joining Hong Kong and Singaporean investors buying in the French capital's city centre, estate agency Knight Frank says.

"It is the first year we have begun detecting mainland Chinese demand, albeit in its infancy," said Mark Harvey, an international residential consultant at Knight Frank's Paris office. "They are primarily looking at secondary market properties in prime areas like the 7th, 8th and 16th arrondissements."

The Chinese property for family use, targeting apartments in the €3 million to €6 million (RM12.13 million to RM24.26 million) price bracket, he said.

"They (the Chinese) are buying for personal reasons where an offspring is studying or working in Paris," he said. "They are always cash buyers, but very low-key."

Estate Agency HomeHunts said most of its clients wanted holiday homes, although two families wished to relocate permanently.

"We currently have a number of Chinese clients looking for properties in both the French Riviera and Paris," HomeHunts' director Tim Swannie said. "We sold a property last year to a young Chinese couple. It was on the [Antibes] and it was a three-bedroom villa, which required modernising. The price was €2.4 million."

HomeHunts' Hong Kong-born Riviera office manager Amy Bault said most people from the mainland bought apartments off-plan.

She also said buyers found ways around the mainland's strict capital controls.

"The [capital controls] do affect them tremendously, but those with money already have offshore accounts, so this should not be a problem any more," she said.

Corruption in China enabled other mainlanders to circumnavigate rules, she added.

Bault said mainland buyers were also attracted to French culture and lifestyle. "They look up to French culture. They see it as romantic and innovative."

The arrival of mainland homebuyers follows the purchase of French vineyards by Chinese businessmen in 2008. Incoming Chinese buyers are helping to drive up Paris property prices.

"The Paris market is performing well with demand for prime residential property far exceeding supply," Harvey said. "Prices are back to pre-crisis levels, driven by renewed international demand and sluggish inventory levels.

"Lower-end properties, valued at below €400,000, in key areas offering solid rental returns are also performing well. It is driven by domestic and international investors seeking a refuge and investment diversification."

According to MeilleursAgents. com, prices in Paris rose 1.5% in May, which followed a 2.1% increase the April.

In the most expensive area, the centrally located 6th arrondissement, favoured by mainland buyers, homes are €10,819 per square metre following a 4.4% rise in values over the three months to May. — South China Morning Post
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