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The improvement is confirmed in the luxury real estate market in Paris

Perspective

23/01/2016

Luxury real estate professionals in Paris are smiling again. According to Barnes International, the Parisian market grew by 15% in volume in 2015. Barnes grew faster, having sold 738 properties (+38%), with an average increase in prices of 3.2 %. “The real estate market in Paris is benefitting from the return of foreign buyers,” explained Thibault de Saint Vincent, President of Barnes.

The 20% depreciation of the euro against the dollar that has occurred over the last 2 years sharpens the appetite of the Americans, who, more the most part, had almost disappeared after the election of Francois Hollande. Regarding the British, Paris had practically been coined as a “cheap” capital: the average purchase price stood at 8040 euros per square meter in October in Paris, while it exceeded 22 thousand euros in the heart of London.

Buyers from the Middle East are also very present. “For six months now, sales are increasing in the neighborhood of the Avenue Foch due to the immersion of  a new generation of buyers aged 25 to 35 years from Dubai, Doha, Qatar and Saudi Arabia,” lists Mr. de Saint-Vincent. The interest of Chinese buyers mostly revolves around houses with gardens in Neuilly-sur-Seine (Hauts-de-Seine).

The stock of goods for sale fell by 35%

The main downside is that segment assets worth between 2 and 4 million euros remain difficult, especially for large bourgeois apartment in the 16th district, as foreign customers do not hold much interest in them. However, the demand for properties over 4 million euros is rising sharply. In this market, more than half of the buyers are foreigners or French citizens that do not live in France.

According to Barnes experts, the Parisian market should remain buoyant in 2016. “Between 2012 and 2015, prices have jumped from 30% to 40% in New York, Miami and London, while they have stagnated in Paris,” said Mr. de Saint Vincent. “For an international investor, Paris is clearly the city to invest in right now.”

“Since the second half of 2015, the atmosphere has changed. The market regained fluidity as buyers have realized that the fall in prices was over and that interest rates could only go up,' a vision also shared by Charles-Marie Jottras, President of Daniel Féau Group, another major player in the Parisian luxury real estate market.

After two “poorly performing” years,  Féau sales jumped 36% in 2015. Another sign of recovery, the stock of goods for sale fell by 35% during the second half. Ultimately, this shows that the November attacks have had little impact on sales.

Féau also confirms the return of foreign buyers, which represent one third of its sales. “For goods of more than 10 million euros, 75% of buyers are not residents in France. Nevertheless, French expatriates do also bear weight in said goods, 'says Jottras.

At Emile Garcin, another significant player in this market, the situation is not too different. “After a 20% increase in sales volume in 2015, we expect a similar increase in 2016,” said Nathalie Garcin, Executive Director of the group. “But prices should not go up as the proximity of the next presidential election will create a climate of uncertainty.”

© Le Monde - published on Barnes International on 23/01/2016

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