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Paris home price surge means less value for Brexit-hit bankers
[JOHANNESBURG] Bankers swapping London for Paris after the Brexit vote are moving from a slumping luxury-homes market to a red-hot one.
A weakening pound has "meant differences in prices between Paris and London have fluctuated significantly over the last 12 months," Databiens, the French unit of property researcher LonRes, said.
"Since the start of 2016, prices in Paris have begun to rise, whereas in central London we saw values fall."
That's bad news for bankers relocating from London, with HSBC executives saying they plan to move as many as 1,000 traders to Paris. Home values in the French capital rose 9 per cent in the first quarter from a year earlier and are 22 per cent more costly for sterling buyers, the researcher said.
The price surge in Paris marks a turnaround from 2012 through 2015, when values fell there while London's luxury homes were soaring.
The premium for houses and apartments in the UK capital over Paris has fallen from more than 130 per cent in mid-2015 to 71 per cent in March, in part because of sterling's decline, Databiens said. The pound has fallen 5.5 per cent against the euro in the last year, according to data collected by Bloomberg.
London home values grew at their slowest annual rate in almost five years in February as values in the capital's most expensive boroughs including Camden and Kensington and Chelsea fell, according to Acadata and LSL Property Services Plc. A tentative recovery at the top-end of the London market "appears to have fizzled out," the report said.
Prices across London rose just 0.1 per cent in February to an average £606,780 (S$1.09 million). That left the annual gain at 1.5 per cent, the weakest reading since April 2012.