Overseas investors 'being put off Paris'
Overseas property buyers are starting to shun Paris, a new report has revealed.
According to Savills, the French capital had been experiencing particularly high rates of house price inflation until late 2011, Property Wire reports.
However, figures from the organisation showed that between January and June 2012, the value of property in the city fell by 3.4 per cent. By contrast, prices went up by 1.1 per cent in New York and 2.8 per cent in London.
Savills has attributed the slump in Paris partly to the election of Francois Hollande as the new French president, since he has increased the tax burden for the wealthiest people.
"Those who have property and other assets in France worth over €1.3 million are facing significantly increased annual taxes," it commented.
Savills noted that Mr Hollande is considering hiking up taxes on rental income and applying them retrospectively to the beginning of this year, as well as raising capital gains tax.
The organisation pointed out that overseas property investors are also being deterred by the continuing debt crisis in the eurozone, as they have become "reluctant to put money into euro-denominated assets".
"Paris is the biggest loser of 2012 - further price falls now seem unavoidable in the French capital," Savills commented.
As a result, more investors might become keen to transfer money to the UK, as the group believes London will be the "potential beneficiary" of this development.
This, it said, is because they will want to tie up funds in an "alternative haven within the geography of Europe, but outside the eurozone".
Savills' findings come shortly after Knight Frank noted that the value of prime central London property went up by 0.5 per cent last month. This, it said, was driven partly by continued interest in the market from international purchasers.