Luxury property in Paris flourishing since the start of the year
According to real estate professionals, 2015 saw the luxury property sector in Paris experience a booming recovery. Since then, opulent apartments and high-end mansions are once again being snapped up by wealthy buyers, to the delight of Parisian agencies.
After three years of crisis, where buyers were scarce and the luxury property supply stockpiled, 2015 saw the high-end market begin to thrive once again. Real estate professionals attest to a strong recovery in activity since the beginning of last year. Long forsaken in favor of other European cities — such as Lisbon, London and Barcelona — Paris is once again attracting buyers intent on purchasing high-end real estate in the heart of the city.
A survey led by lux-residence.com and Coldwell Banker revealed that sales in this segment of the real estate market exploded across last year. “Our sales increased by 157% in the capital in the first half of 2015 compared to the same period in 2014,” says Laurent Demeure, CEO of Coldwell Banker France. Additionally, the company’s average selling price is 1.418 million euros in this period, which is 31% more than in the first half of 2014.
Within the luxury property market, the segment of apartments located in the 5th, 6th, 7th, 8th and 16th arrondissements and costing between 1.5 and 2.5 million euros is faring particularly well, according to Coldwell Banker. “Previously advertised for over 3 million euros, properties whose prices have become more reasonable have opened up a wealth of new purchasing opportunities,” notes Demeure.
This positive trend is partly explained by buyers increasingly favoring property in the capital over villas along the coast. While 42% of wealthy buyers purchased on the French coast in 2014, in 2015 only 24% of them were interested in acquiring homes in this area. Instead, 26% of high-income clients prospected in Paris, an increase of 11 points compared to 2014.
Another explanation for the luxury property market’s revival is the drop in prices. Indeed, 51% of buyers surveyed in the study felt it was the right time to make a move. Nonetheless, a majority of actors in the market believe that prices will continue to fall in the next six months. This price decline is a major factor in the return of non-resident investors, who keep the resale potential of their property in mind. Conversely, rent caps recently enforced in Paris have led to rental investors deserting the city.
Thus, more than ever, the luxury property market in Paris is dominated by foreign investors. They comprise 55% of buyers in the 16th arrondissement and 71% in the Saint-Germain area. Non-resident buyers are also extremely active in the 6th, 7th and 8th arrondissements, the Marais in the 4th and the Latin Quarter in the 5th, unsurprisingly coinciding with areas rich in high-end goods.
Particularly attractive to American investors, the fall of the euro has also had a lot to do with the renewed appeal of the Parisian property market.
Photo credit: Wikipedia / David Brossard