Chinese buyers pile into French luxury property, unhindered by ownership restrictions

By Cheryl Arcibalcheryl.arcibal@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3025399/chinese-buyers-pile-french-luxury-property-unhindered?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
Unencumbered by any property curbs or the kind of foreign owner restrictions seen in other markets, Chinese buyers are snapping up luxury properties in France's prime residential and holiday districts.
In the first quarter of the year, Chinese supplanted Italians as the biggest group of foreign buyers of homes in the French capital, data from the Notaries of Grand Paris showed.
"Demand for French property from China and Hong Kong has been rising since 2014. The ending of the euro-zone crisis and the return of economic growth in France spurred investors who were able to see a growth opportunity in a market that was relatively undervalued compared to many global investment markets," said Liam Bailey, global head of research at consultancy Knight Frank. "We have seen a number of buyers from Hong Kong and China targeting vineyard and other lifestyle-led investments."
There are plenty of reasons for the demand, both practical and sentimental. Unlike London in the UK, Toronto and Vancouver in Canada, and other traditional markets preferred by foreign investors, Paris has not rolled out foreign buying restrictions.
Mortgage rates are also at a "historic low".
"It's possible to get a loan for 15 and even up to 25 years and find rates lower than 1 per cent for a 15-year loan, and around 1.2 per cent and 1.3 per cent for loans of over 25 years," said Herve Guinebert, managing director at the Hong Kong representative office of Banque Transatlantique.
Values of homes in Paris rose 7.6 per cent in the year to June 2019. That was the second-highest growth among 23 prime residential markets tracked by Savills. Rents in the French capital grew 1 per cent in the same period.
Prices are likely to be boosted by the Grand Paris Project, Europe's largest infrastructure project over the next decade, and the 2024 Summer Olympics.
Rental income for second-home owners is reliable as France remains the most visited country in the world, with over 89 million arrivals in 2018.
"Owning property in France is a...