Paris is number 1 city for property investors

Paris has become the most popular place in Europe for property investment according to a list released by leading estate agent CBRE. The French capital overtook London during the second half of 2011 thanks to deals worth €7.9 billion as opposed to €7.8 billion in the UK capital.


A busy second half of the year saw Paris snapping up 14.2% of international deals as investors rushed to complete transactions before the end of the year and ahead of the closing of some property tax breaks.

In addition to being the most popular place for property investment, Paris is now the most expensive capital in which to rent accommodation after rental prices increased by 4.7% during the year.

The 20 arrondissements of Paris escaped the bombing of the Second World War, which means that new-build developments are rare and property supply is limited forcing up rental prices. The City of London, which has far more new-build properties, has seen rents fall to a 25-year low, although the West End market is still buoyant. New York also saw a healthy rise in rental costs as prices increased by 6.5% during the first half of 2011 and 6.2% during the second half.

However it was not all good news as rental growth slowed in many new world cities such as Hong Kong, Shanghai and Moscow during the second half of 2011.

Foreign investors in 2011 were made up mostly of US and Canadian buyers who provided 28% of cross-border transactions, with the US accounting for €9 billion worth of deals. Germany was the next most active buyer taking a 12% market share, while UK buyers came in third place making 9% of property transactions.

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