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Real estate: how Covid-19 has increased the price of assets with balconies, terraces and gardens

Real estate: how Covid-19 has increased the price of assets with balconies, terraces and gardens - by Hélène Dupuy on June 5th 2021

With the global pandemic and successive lockdowns, assets with an exterior space are more and more in demand in city centres, and their price has increased significantly. But to what extent?

Outside space is worth its weight in gold in city centres. “Repeated lockdowns have changed the importance of having a balcony, a terrace or a garden. This has become decisive for more and more people who prefer to live in major cities” explains Olivier de Chabot, CEO of the Mercure Group.

His group, with agencies notably in Paris, Lyon, Nantes, Bordeaux and Toulouse, has seen the demand for apartments and houses with an exterior area increase by 30% in just one year.

Driven by the health crisis, the asking price of assets benefiting from such areas has been amplified by their scarcity in city centres.

“Even though such factors as surface area, aspect, privacy and upper floors still count, in Paris a balcony or a terrace can increase the price of an apartment by 75,000 euro” according to Olivier de Chabot.

“Although the geographical location is still the determining criterion and will remain so in major cities, outdoor space, because it is rare and sought-after, has become a real bonus, offering breathing space in the heart of a built-up area" he adds.

In Paris, an outdoor space is a luxury

This trend is particularly true in Paris, where owning an outdoor space is a rare privilege and is consequently keenly sought after.

In the luxury segment of the market, an outdoor area has become a clear search criterion. “A significant percentage of our clientele has moved on from considering an outdoor space as a bonus to considering it to be a must have” says Nicolas Pettex, Managing Director of Daniel Féau and Belles demeures de France.

Consequently, the way in which a terrace, for example, is presented has evolved. "From simply counting a terrace as supplementary square metres, the Féau team now adopt the principle that a quality outdoor area also increases the value per sqm of the indoor surface area" he explains. And as a result, this type of property is more expensive.

In the ultra-luxury segment, the group has never concluded so many sales of houses in Paris, and particularly private villas in the capital’s 16th district or in neighbouring Neuilly-sur-Seine. And sales have never been so rapid.

According to Nicolas Pettex, successive lockdowns have clearly changed the way we see our everyday environment and what we expect from it. "Buyers have come to appreciate the everyday benefits that a beautiful apartment or private house can offer". As a result, many are looking to move in order to make the most of outdoor areas such as terraces and gardens, as well as the added bonuses they can offer.

There is also another reason why such assets are so keenly sought-after. "The near-zero yields that so-called risk-free financial products are generating are no doubt contributing to the trend. Money blocked in a bank and bringing in nothing would be more usefully used to buy a few square metres of terrasse that you can enjoy every day” he adds.

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