The absence of wealthy foreign buyers as a result of the Covid-19 pandemic has not led to a drop in the price per square metre. The top end of the market remains a safe haven, real estate agents believe.
A beautiful property with a garden located in a private street in the heart of Neuilly-sur-Seine (Hauts-de-Seine) was sold in July in a matter of hours, with four offers submitted at the asking price of 3.3 million euro. Cases such as this are not unique, according to Thibault de Saint Vincent, CEO of the luxury real estate network Barnes which concluded the transaction. "Flash sales, concluded in just a few hours, are numerous: the buyers are there."
With prices in Paris generally above 15000 euro per square metre, a long, long way off the 10620 euro average calculated by the Notaires de France, the luxury real estate market remains remarkably dynamic.
In desirable neighbourhoods, prestigious properties boasting high ceilings, sometimes renovated by interior decorators and as a bonus with a terrace or a view of the whole of Paris, are keenly sought-after. Some neighbourhoods are witnessing a remarkable boom, with buyers wishing to settle for example in the heart of the 6th and 7th districts willing to pay an average of 20000 euro/sqm.
And some transactions seemingly beggar belief: this summer, the specialist in luxury Parisian real estate Daniel Féau sold an apartment near Luxembourg Gardens for a mind-boggling 49000 euros/sqm. "Buying an apartment in Paris remains a safe bet in a market where the supply of assets is significantly inferior to demand" analyses Nicolas Pettex-Muffat, managing director of Daniel Féau and Belles demeures de France.
At a time when ready cash has become significantly less productive and the CAC 40 has lost 15% of its value since January 1st, most buyers of luxury real estate are not only looking for a beautiful main residence or a pied-à-terre, but also a quality investment. "Upmarket real estate is a safe haven. Buyers with a budget of 3 to 4 million are looking for an exceptional property to rent or live in because they know that it will not decrease in value” comments Laurent Demeure, CEO of the Coldwell Banker France and Monaco network.
As a result, buyers willing to pay 15 to 20000 euro/sqm flocked back to the market as soon as lockdown restrictions were lifted. "The market is dynamic, with customers looking for a range of properties from the compact pied a terre to the exceptional 500 sqm apartment" notes Nathalie Garcin, CEO of the Emile Garcin group.
An enthusiasm shared by Alexander Kraft, CEO of Sotheby’s International Realty France and Monaco. "We recorded a 20% increase in sales concluded by our 55 agencies between January and June, and mainly thanks to French buyers." Usually representing 50% of transactions in Paris, and up to 100% on the Côte d'Azur, the network’s foreign customers have however more or less deserted the French luxury real estate market since the outbreak of the Covid-19 pandemic.
The call of the great outdoors
"Although we were able to organize physical visits with a few American and Mediterranean clients this summer, the closure of certain borders as well as the Parisian palace hotels limited the presence of wealthy foreign buyers who are traditionally very active in the Parisian luxury market” analyses Nicolas Pettex-Muffat of Daniel Féau. The presence of a few Lebanese clients looking for an investment in euro was however noted.
The absence of these foreign millionaires has not however affected prices. "In Paris, with a shortage of prestigious properties the upward trend remains. In other cities such as Lyon, Bordeaux, Toulouse or Perpignan, prices stabilised” points out Laurent Demeure for Coldwell Banker. And buyers are becoming increasingly selective. "We're beginning to see a two-tempo market: flawless, meticulously renovated apartments on upper floors sell rapidly and at high prices. Buyers for apartments with less to offer are naturally significantly more difficult to find" says Thibault de Saint Vincent of Barnes.
Another very recent trend is for city dwellers, even those living in the most beautiful apartments, to put a terrace or even a garden near the top of their list of requirements. "We have been contacted by Parisians who want to move their families to the west or south of the capital, for example near Fontainebleau, and who plan to work from home a few days a week" confirms Nathalie Garcin.
This desire to move further afield is also witnessed in Bordeaux for example, where prices have remained stable since the start of the year. "The market is active. To acquire a luxury apartment in the city centre, buyers are prepared to pay between 6000 and 8000 euro/sqm, or even 10000 euro/sqm for an exceptional property" confirms Aymeric Sabatié-Garat of Barnes Bordeaux, who has seen more and more Parisians settling in neighbourhoods benefiting from easy access to the airport or train station. The same goes for Thomas Vantorre of Barnes Lyon: "A quarter of our buyers are Parisians looking for a change in their lifestyle, and they are ready to pay 6000€ per sqm, and up to 12000 euro/sqm for an exceptional property."