On this week's podcast we chat with Susie Hollands, Founder and CEO of VINGT Paris.
Susie shares her insight around the Paris property market and how different it is to the London market in terms of available stock, rental investment options and how Capital Gains Tax can positively affect long term ownership. We talk about how Paris has limited availability of stock and what a challenge renovations can be with the current lack of contractors and raw materials.
We discuss famous football players and how the Paris market, while much more resilient than a market like Manhattan or London for example, is seeing an increase in American buyers due to the strong exchange rate at the moment.
Join us for Susie’s global overview of the overall French market and the local London market and the impact of events such as Brexit and the pandemic.
As always, we would love to hear your thoughts. Please feel free to contact us if you have any questions, or you would like to work with Susie who is one of our trusted Experts.
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Interviewer - Farnaz Fazaipour | Property Investment & Ownership
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Hello, and welcome to the London Property Podcast. I'm your host Farnaz and today when conversation with Susie Hollands, who is a top agent in Paris, you set up your own business in Paris, and you're going to tell us all about it. And the exciting things you see that go across markets. Welcome, Susie.
Susie Hollands 0:28
Hey, Farnaz. Thanks a lot for inviting me happy to be here. Yeah, um, well, I used to live in London. So never lost the love for the city. But I've been living in Paris for almost 20 years. And I set up my brokerage there in 2003. And, yeah, we deal with high net worth clientele from all over the world. I mean, literally customers come from every corner of the planet. Because I think a property in Paris is really a trophy asset. And so when people get to the point where they've maybe sold their business, or they're starting to slow down, retire a bit, they come to Paris, mainly for the lifestyle. Sometimes they want to have a Euro asset as well. But the it's an investment, but it's mainly an investment combined with the lifestyle benefits of Paris, which is, we all know what that is.
right? So it's very much a pleasure investment, rather than a necessity investment. For the high net worth.
Susie Hollands 1:39
Absolutely. There's a desire for something that people have probably got a strong emotional attachment with the city for one reason or another, a lot of romantic people interested in food, literature or art, especially. And maybe they visited Paris, when they were a lot younger and didn't get it out of their system. A lot of people are repeat visitors. So they're coming twice a year and staying in hotels. And definitely, it's quite different when somebody decides they want to own in France, because, you know, we do have quite a complex business environment in France. And so they have to be very engaged with that and understand what that's all about and decide if it's for them or not. But it's actually not as complicated as you might think. And there are a lot of protections for someone buying and in France as well, it's a good, it's a good system for purchasers.
So I mean, there's some some thing in sort of real estate rules that apply sort of globally with regards to taxes you pay when you buy taxes you pay when you sell, but there's something that's very French, which is if you own a property for a very long periods of time, you end up not paying capital gains tax, is that right? 30 years or something?
Susie Hollands 3:06
Well, first of all, you wouldn't pay capital gains tax, if it's your principal residence. Other than that, you will pay it, but it's regressive. So after 30 years, there's none. Until that time, if you buy in an area where the price, you know, shoots up, it's going to be maybe prohibitive, but most people's exposure is not going to be that you know, the markets not like New York City. Paris is a different beast, you know, the sixth and the seventh are on these more on the 16th than the eight. Those are the more prime areas and prices are going up but you know, steadily.
So how has the market behaved in the past 20 years that you've been involved?
Susie Hollands 3:55
Paris is just uber resilient. I think the the market is very, very resilient, much more so than Manhattan, for example. I mean, I've been there through 2008 financial crisis, have been there through terrorist attacks. And now COVID pandemic never really changes. And as the simple reason, there is not a lot of stock. So it's actually very small, much much smaller than London. And to be honest, there's quite a lot of bad property out there too. So the really good thing the gems, there are few and far between and got to be pretty determined to you know, lock in those, those purchases. Those are quite active off market property, you know, sub market going on so that's where a lot of interesting products trade.
So there is a lot of encouragement for people to hold on a you can't find the stock if you sell and you want to replace it but the Also, they're giving tax incentives for people to stay in the market for a long time. So that's why you're not finding this. Just turn around.
Susie Hollands 5:07
That's right. And there's a disincentive to flip property, that doesn't happen. So that's why areas take longer to gentrify in Paris, it doesn't have the same piece of London or New York. It's not a property is not a business. It's a heritage thing. It's a family property, perhaps, or people are buying to hold it for a long, long time. And it works well for that. But it's a great, you know, hedge against other other locations where you may own or, or different types of investments. It's a safe, safe haven, really. And every time there is some kind of upheaval in the world, we will see the market move in relation to that, let's say, the Arab Spring, for instance, lots of purchases happened at that time. And then we're quite susceptible to currency fluctuations. So certain years when we've had a lot of American buyers who just said, wow, I've been waiting until the dollar got stronger. And it's the sweet spot now. So, you know, they just phone up and say, What do you have with an amazing river view? Let's go shopping. So it was fun.
Fantastic. Well, you were cute that you were quoted in the in the press when Messi was in Paris looking for property. So I'm sure that we're not going to get too much out of you with regards to the specifics of messes, house hunting, but I guess there is a lot of movement with the football clubs as well, from a rental perspective.
Susie Hollands 6:42
Yeah, I mean, I'm a Barcelona fan. So I don't support PSG, either, I love football, I follow it. And we do have some high level sports people as customers, football and tennis mainly. And we've developed a relationship with the club in Paris, because they sometimes need nice properties for players. And we also have a rental portfolio of luxury properties that were bought with us. And they're furnished. And so we've been got to know them over the years. So the problem is that usually football players need lots of garage space. And that's not something that we have in Paris townhouses. And in fact, townhouses are even quite rare themselves. They tend to be in the little bit outer districts of Paris, usually, the players end up living in New use your sin, which is, let's say, you, you know, where the Arc de Triomphe is. And if you start heading for like, the phones, you're going in the right direction, or maybe around the blood billowing or blowing itself, where you can find big homes, you know, for children, cars, carriages, and big gardens and things. So they tend to go that way. And to go that way. And then they need others, you know, they need high security and things as well. So to be honest, in central Paris, it doesn't suit them.
And is there actually rental investor market? Or is it really how much you know, Intel you have? And you know, who to call to try and find the stock? Or do people actually mean you said before that people tend to invest in Paris for romantic reasons, for personal reasons, family reasons. But is there interest from investors to actually buy stock for purely for renting out? What are the returns? Like?
Susie Hollands 8:42
There absolutely is? Yeah, I mean, I think that goes it goes along with how easy it was to borrow money and in France, and it's suddenly it's very difficult now for non residents to get loans but in certain times there, it was much easier. So that's a lot of our rental stock comes from those days when people said, Well look, this property can wash its face, I can buy it and have two months to to live in it over the summer. These people who are selling it to me do management, and they all find me tenants. So we've got 250 property like that. And there's a very healthy demand that occupancy rates like 85 to 90% If things are all going well, just has to be well, well renovated and decorated and we have a sort of niche market where it's furnished rental but it's really corporate people are people coming to you know, experience the lifestyle so they need everything to be ready. More like the kind of lettings in London, the high end lettings. Here it's a similar market. So internationals who just want to arrive with the laptop and their clothes and have everything on top.
There was a time going back maybe 1520 years now where we saw a huge influx of French people moving to London for political tax reasons and what was alarmed. Right. So that relationship sort of between the London London Paris real estate relationship, can you tell us a bit more about that? What happened, for example, around Brexit time?
Susie Hollands 10:31
Well, Brexit it was predicted that there would be, you know, an enormous influx of people coming back to Paris, it never really happened. I think there were Brexit stimulated a lot of people to reassess their global portfolio. And so it wasn't this sort of, you know, we're leaving our jobs and we're, we're moving from South Kensington and we're coming back to Paris, it was more subtle, we would eventually find out that people were reorganising their business, they needed the European base. So they decided to relocate to Paris. I believe that a lot of the French who left France liked it in the UK. And they said, Thanks, but no thanks. So they didn't really come back. And then, at the time, were, you know, in the lead up to the actual, hard Brexit. I mean, we were trying to gear up for the possibility of this huge demand that would surge and it never appeared. It was more like a trickle. And it's a good thing in a way because Paris was not ready for a huge demand for luxury product because we don't have it. You know, people always ask for I want to luxury rental, I want to buy a luxury turnkey property with air conditioning. I mean, this is just a tiny segment of the market that we're talking about. Most flats are unrenovated need renovation need got renovation, and you even to get workers and materials and things that right now, you know, that could take over a year to do those flats. So
they're all quite historic buildings. So it's, it's probably have to do restorations. You can't just go in and do things.
Susie Hollands 12:30
I think that's, that's not so much for blockage because you can do what you like inside the property. As long as you're not touching things on the facade of the property. In your own unit, you can do what you like, if you're not needing to do structural work. You know, if you want to move walls and create new space, you'll need a structural engineer, you'll need to get permission from the corners Association. But unless you need to do that you can do what you like with your interior decorator and architect. So it's not too paperwork heavy for the renovation, right.
But there isn't such a culture of fix and sell really in Paris, like there is in London?
Susie Hollands 13:13
No, no, it's just a tiny little group of people who are buying unrenovated properties which are incredibly difficult to find good address good features, like you know, fireplaces and high ceilings and beautiful parquet, doing them up and reselling. There's a few but literally under 10 people doing that in Belarus.
So the way that you didn't get to sort of mass exodus from London to back to Paris at Brexit, are you? Have you noticed a shift in interest from French people to London? Um,
Susie Hollands 13:53
I don't know, because I think that your stamp duty situation is a bit prohibitive. And then Brexit just made everybody you know, put everything on hold, like, let's see what happens. Let's see how this plays out. Then we've got, you know, the pandemic, so haven't really seen an uptick in French, you know, focus on London at this point, probably until things settle down as what's going
to happen. So in recent times, the most demand that you've seen has been from any particular destination or its it hasn't really been one country over another that's shown interest, actually,
Susie Hollands 14:35
yes. Within the last sort of six months, at sea, we had many more customers from Northern Europe, Germany in particular. I've had quite a lot of customers from Greece. It's really, that South Africa Britain, people based in Britain and based in London, but not Brits. So internationals who are just, you know, they've had time to reflect in the last couple of years as we all have, like, always thought about maybe living in France. The other thing I've seen is that so many people who rent with us now say, I'm renting, try to buy, I'm going to buy with you guys. But right now I'm going to rent for six months and see where this goes, like, literally half of our renters now say this. So that's like, must be increased of 35% of people know, dry before
you buy. Yeah. And you are involved in the rest of the locations in Paris, in France, I should say, as well, not Yeah, we do.
Susie Hollands 15:52
Firstly, the most sought after places pronounced for our customers. And then also, let's say the Riviera, but that's there's different micromarkets, whether it's central pay cap for kept on tebe. And then around Bordeaux, so between Bordeaux and Toulouse, we have got interest there, we've actually got a little mini office down there, because I love the region, and some very interesting opportunities for people who are interested in a country house. And that area's called Gascony, and it's a little under the radar is I'd say it's equivalent to Tuscany. It's quite low key. There's quite a lot of discreet wealthy people, there was little private airport, you can get very, very nice country house and Chateau for a very reasonable price compared to some of the other locations and you have the TGV train. So you can get to Paris in about three hours. That's, that's a really interesting region to look at.
Okay, good to know. Are you having? Are you experiencing what we experienced here that people are actually looking to go out of the city after COVID? Or is it is the French not being as obsessed with outside spaces? Some of the mic markets we have here, hamsters gone off of the scales, for example.
Susie Hollands 17:22
Um, I think a lot of the French left were the ones who were like, families that had some two kids and want needed to have more bedrooms. And they were like, Okay, I'm done with Paris, I'm off. And so that's not really our customer. So that was the sort of middle class French people who left went to either Norman de Marsay. Or, yeah, maybe seeking son, so further south.
So we're quite obsessed with price per square foot in London, everything is price per square foot, and nobody can think of anything unless it's price per square, it's
the same in Paris. So
what is, you know, a really expensive price per square foot to pay in Paris,
Susie Hollands 18:07
I really hate this thing about obsession with our Well, we are price per square metre. I'll try and do the calculations for you. But you can tell us, I tend to the kind of customers that we have, they're looking for a special thing. Like it's like a vintage car, or it's something they don't need. It's just a beautiful thing. And Paris is where they've just focused on. So before COVID 30,000 euros used to be, oh, my goodness, that's such a huge budget, you know, actually now it's more like four to 45 can go up from there. That's unheard of in Paris until you know, the last couple of years. So for the best best thing. So that's
not too different to London. That's about 4000 pounds a square foot.
Susie Hollands 19:05
So we've caught up with you actually. Yeah, which we were way behind.
And what's next you think for the Paris market?
Susie Hollands 19:13
Follow what's next for the Paris market? I think people will definitely need to work with a buyer's agent. You know, probably pay fees when they're being represented. It's it's so necessary. If you want to get to the best product, it will be impossible, because the market is extremely fragmented. There's no transparency about prices. We don't have databases and as much as you do in London, it's a minefield for the consumer. So the need to work with a buyer's agent. Prices will keep going up. Really think so I can't see how they won't because we don't have any new build. Right? We've got nothing You guys hear, you know, lots of different parts of London are regenerating and can be rehabilitated, whereas we just, we're just, we've got this ring road, the periphery. So, you know, there's a lot of areas of Paris that people wouldn't just wouldn't want to live. There was only a few that we're gonna really consider, to be honest.
Okay. Well, thank you so much for talking to us today. That has been an interesting insight into the Paris market. And for our listeners, they can know that they've got someone they can go to who can speak in their language, and show them the ropes and make comparisons between areas in Paris that are like areas in London. Yeah,
Susie Hollands 20:44
I think this year. Yeah. Thank you so much.
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