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Luxury real estate: the Parisian market is likely to experience a drop in prices

Luxury real estate: the Parisian market is likely to experience a drop in prices

The Parisian luxury real estate market could well see a strong rebound for the year 2021 as reported by the Barnes real estate agency network.

 

This month of January, the Barnes Group published its annual index, and the network of real estate agencies takes stock of the state of the luxury real estate market in Paris. The price of Parisian homes is close to one million euros or more: “There is no price drop yet, but we can expect it soon in certain segments,” adds Richard Tzipine, Barnes‘ managing director in Paris.

 

Barnes reports on market prices in recent years and notes that between 2015 and 2020, the value of high-end goods rose by 30% and in 2019 alone, prices had increased by 8% in the capital. However, the group notes that the curve is tipping.”The end of 2020 marks a break. Prices are stabilizing, with a rebalancing of supply and demand,” the network communicates.

 

Imperfect goods, i.e. dwellings on the lowest floors, with opposite sides and other inconveniences, could benefit from a 10 to 15% discount. A trend explained by increasingly demanding buyers: “Buyers have more choices than before,” comments Richard Tzipine.

 

This trend is visible and even measurable, for example for Barnes on January 6, 4,164 prestigious homes were for sale in Paris compared to 2,789 last year. Negotiations can then come to the table: “It is, therefore, easier to negotiate discounts of around 10%. If the sellers are in a hurry, they might just as well accept,” confesses Richard Tzipine.

 

On the other hand, it is out of the question to negotiate on the most prestigious properties, because here there is no lack of buyers, despite the pandemic and the loss of potential foreign buyers, there is still a large proportion of expatriates from Brexit or even Covid-19.

 

Moreover, new spots are now seducing luxury real estate clients. Indeed, Barnes notes that new buyers are more easily attracted to a residence outside Paris, closer to green spaces. Barnes adds that around Biarritz, Deauville, Bordeaux, or the Bassin d’Arcachon, his agencies “have doubled or even tripled their activity“.

 

Previously, the buyers in these regions were more likely to be in their fifties, preparing for their retirement. Now, we generally see much younger families, who send their children to school here,” says Thibault de Saint-Vincent, President of the Barnes network.

 

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At the limits of the capital, the supply of luxury real estate does not always follow the demand: “Many families are looking for prestigious houses around Paris. At the moment, however, few owners are willing to sell. We can therefore imagine that prices will rise on these properties close to Paris next summer“, says Richard Tzipine.

 

Finally, according to Barnes, another index that proves that a drop in prices is imminent on the Parisian market: flash sales are becoming rare. Flash sales are transactions signed less than 72 hours after the property is offered on the market, a situation that is common in the luxury real estate sector. In Paris, in 2020, the Barnes network had 80 flash sales, compared to 152 in 2018 and up to 191 in 2019.

 

Read also : STUDY: THE HOTEL INDUSTRY IS EXPERIENCING AN UNPRECEDENTED ECONOMIC SITUATION

 

Featured photo : © Barnes

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