14 Leggett International Real Estate
SPOTLIGHT - THE NEW-BUILD MARKET
The demand for VEFA in Paris and
the Île-de-France is changing.
French investors are becoming
scarcer, with the reduction in the
benefits of the Pinel Law from 2023
and the increase in the number of
alternative investment products.
However, the supply from developers
remains dynamic, driven by the
progress of the Grand Paris project.
There is an emerging demand from
international buyers/investors,
who like the superior energy
performance of new properties. This
is because they are not at risk of
being sanctioned by the new climate
laws and banned from rental (which,
from January 1st is already the
case for the most energy-intensive
properties).
Matthew Carr explains more:
"Non-resident buyers are becoming
more interested in VEFA for several
reasons, the first of which is the
dollar/euro exchange rate which,
despite a recent adjustment, has
increased the purchasing power of
Americans and those whose income
is related to the dollar by 15% in
12 months. Since Covid, Americans
and residents of countries with a
currency pegged to the USD, are
well represented in the Paris market.
The advantages of VEFA are
clear: ease of maintenance from
a distance (multiple guarantees,
no maintenance work or energy
upgrades), plenty of outdoor space
and larger rooms/superior space to
older apartments.
The difference in price per square
metre between Paris and the
nearby suburbs remains significant
(between 30% and 40%). Attracted
by the quality of the newbuilds, more
foreign buyers are willing to look on
the other side of the périphérique
than in the past, when the focus was
more on the city centre although
this is still an active sector. From
Clichy to Issy-les-Moulineaux, with
international buyers the suburbs
near the west of Paris remain more
popular than the eastern suburbs,
although there are some high-end
developments in the Val-de-Marne
that are starting to attract overseas
investors".