Paris Airbnb landlords forced to sell in Covid tourism slump
Landlords who can no longer afford to maintain properties are selling them, as rental revenues have fallen by up to 70%
Paris landlords are selling their flats as a lack of tourists in the past year has meant rental revenues have fallen by up to 70%.
The Paris mairie estimates there are around 35,000 Parisian properties posted on tourist rental website Airbnb.
But during the health crisis tourist numbers have plummeted, and many landlords have been left shouldering costs they cannot pay.
Frédéric Teboul, boss of multiple branches of estate agency Guy Hoquet Aleph in Paris, told newspaper Le Figaro, “we have more and more sellers in this position”.
“Banks froze their loans for a few months, but landlords had to start repaying mortgages and, without tourists, they weren’t able to,” he said.
Property prices falling
Landlord Philippe bought a studio in Paris at the end of 2019 and since then has only been able to rent it for a few weeks.
He eventually sold the property for €320,000, after completing renovation works - €30,000 less than he bought it for.
He said: “The losses are heavy, but what I want now is to lose as little money as possible.”
All over the capital property prices are falling.
Online agency meilleursagents.com estimates property prices fell by 2.5% in six months from September 1, 2020-March 1, 2021.
This comes as local authorities and French courts have tightened conditions for renting properties on Airbnb and other platforms.
A recent ruling against an Airbnb landlord who broke city rules stipulating how often properties can be used for short-term rentals has opened the floodgates.
Now 420 other cases, which had been stalled in anticipation of the ruling, have been reopened representing total fines for landlords of around €9million.
City plans to buy back properties
The Paris mairie set out plans to purchase properties used primarily for Airbnb rentals from landlords in June 2020, in order to rent them out at cheaper prices and reinvigorate the rental market.
But exactly how many tourist rental landlords are now planning to sell properties is difficult to measure.
Samuel Berrih, boss of multiple Century 21 estate agencies in Paris, said many landlords who now want to sell do not admit that they have been renting their property to tourists.
“There are some who tell us and some who don’t, but we can normally tell,” he said.
“When they show us photos with a basket of croissants on the table, or towels rolled up on the bed, there isn’t much doubt [that they have been renting the property].”
A study by the University of Bordeaux-Montaigne of 300 owners of multiple properties found that 8% were planning to sell at least one home, Le Figaro reported.
Return to long-term rentals
A further 23% were planning to rent one of their properties, as are many landlords in Paris – but to a different kind of tenant.
Popular long-term rental site PAP saw a 49% rise in properties being offered to tenants in the capital in February 2021.
Mr Teboul said: “Landlords are starting from year-long rentals, to ride it out until the crisis passes.
“But they still have to cover a loss of income of 50-70%.
“Anyone who has a loan won’t be able to.”