REAL ESTATE: RECORD-BREAKING SALES IN PARIS
CHALLENGES - BY ERIC TREGUIER 07/08/2021
INTERVIEW - In Paris, sales of high-end assets are booming and prices remain high. The analysis of the leading specialist in Parisian luxury real estate, Charles-Marie Jottras, CEO of Daniel Féau Conseil Immobilier.
Is the real estate market in Paris dead? No way: it’s actually breaking records… for upmarket assets. Transactions are booming and prices are remaining high. The analysis of the leading specialist in Parisian luxury real estate, Charles-Marie Jottras, CEO of Daniel Féau Conseil Immobilier, historical leader in this highly coveted market for beautiful apartments and private mansions.
Challenges - Your group, Daniel Féau Conseil Immobilier, specialises in luxury real estate transactions in Paris. With the Covid-19 pandemic and successive lockdowns, how have the past twelve months been?
Charles-Marie Jottras - The Féau group specialises in the sale of beautiful apartments with terraces or gardens, private mansions and villas in the capital’s most desirable districts as well as in Neuilly, Boulogne, Saint-Cloud, Saint-Germain-en- Laye or Versailles. We achieve 25 to 30% of sales at above a million euro, and around 45% of sales at prices in excess of 4 million euro. In 2020, like all those dependent on the presence of foreign buyers, we suffered to some extent. But if we put aside the year 2020, exceptional owing to the health crisis, and take as a reference 2019, a "normal" year, we see that the first half of 2021 is in all respects marked by a massive return of buyers and a significant increase in the number of transactions.
A first example of a recent transaction: a 400 sqm property with a garden in Neuilly. Requiring some renovation, it was sold by a French vendor to a French buyer for around 7 million euro.
So precisely, what are the figures?
In the market for assets at prices above 3 million euro, we have seen an increase – one may even say modest - of 30% in transactions compared to 2019 (which was already a very good year). I say modest because the market at higher prices, that is to say that at prices over 3 million euro, reacted significantly more vigorously with an increase of ... 150%.
The most important transaction of the year in Paris was the sale, for around 35 million euro, of an ensemble comprising a Town house and an annex house in very poor condition but set in a 950 sqm garden, wedged between two other buildings at the top of boulevard Oudinot. The seller was Dutch and the buyer ... French.
Previously, foreigners were the ones buying at the top of the range. So who are the current buyers?
We haven't seen any Chinese clients in the market, and very few Americans. We had a few clients from the Middle East, particularly Lebanese seeking to protect their families as a result of the situation back home. But we mostly saw French clients, both from home and abroad, including many French employees who worked overseas and who were returning to France. As a result, prices held their own...
A third example of a property recently sold by Féau. A property in Auteuil, of which only the garden is visible to passersby ... Offering 400 sqm of living space, it was sold for around 7 million euro, by a French vendor to a French buyer.
But the French don’t always have the same budget as foreign buyers. What did they buy?
Generally, the wealthy French look for bourgeois apartments in the capital’s prestigious Districts. That is to say around 140 sqm 3-bed family apartments. Traditionally, for each of these apartments that we market, we have several hundred interested buyers in our files. And if the asset ticked the right boxes it was sold in a few hours, or at worst over the weekend. Demand for this type of property has, however, weakened. Wealthy Ile-de-France residents want greenery, and are looking for properties with gardens. In Paris if they can afford it, and if not, in the desirable western suburbs. We can clearly see that the "safe haven" aspect of real estate has now the added appeal of its "daily use value". Buyers with the means bought not because their families were growing or to protect their money, but to benefit from outdoor areas - terraces, gardens - and/or the added benefits that go with them. Prices are rising significantly for this type of property: unquestionably, there has been a lockdown effect!
