Luxury real estate market’s improvement mainly due to foreign buyers
Parisian luxury real estate professionals have been reporting net improvements in the sector over the past year and a half, chiefly boosted by the return of foreign buyers.
The luxury property market grew by 15% over 2015, according to Barnes International, a Paris real estate agency specialized in high-end real estate. The group itself saw an even more impressive increase in sales, having sold 738 properties in the capital in 2015. That figure is an increase of 38% over the previous year. Moreover, the group records an average increase in price of 3.2%.
According to the CEO of Barnes, Thibault de Saint Vincent, “the Paris market has strong benefitted from the return of foreign buyers.” The 20% decline over two years of the euro against the dollar contributed to whet American buyers’ appetite. Investors from the United States having all but disappeared after the election of François Hollande.
Buyers from the Middle East are also very present on the French capital’s luxury property market. “For six months, sales of real estate located in the area of the Avenue Foch have been increasing, with a new generation of buyers aged 25 to 35 years coming from Dubai, Doha, Qatar and Saudi Arabia” recounts Thibault de Saint Vincent. Chinese buyers are focused mainly on houses with gardens in the chic western Paris suburb of Neuilly-sur-Seine.
In Paris and nearby, the sale of properties over 4 million euros has risen sharply – and over half of them are purchased by foreigners or French expats. In contrast, a notable slow point in the sector is for large bourgeois apartments in the 16th arrondissement in the 2 to 4 million euro range. These classic apartments are stagnating on the market, with far more on the market than needed to meet the demand. They don’t seem to interest Paris’ foreign buyers at all.
According to Saint Vincent at Barnes, the Paris market should remain healthy through 2016. “Between 2012 and 2015, prices rose by 30 to 40% in New York, Miami and London, while they stagnated in Paris. For an international investor, Paris is clearly the city to buy property in now.”
Photo credit: Wikimedia / Moyan Brenn