Vingt Paris Luxury Property Reduced 2.94m EUR
The European economy is experiencing a long cycle of economic crisis. Government approval of a number of policies and tax measures have an impact on French and international investors, both psychologically and in terms of their ability to acquire property.
Although the luxury real estate market remains a highly sought-after segment in times of shortage, the balance of power between buyers and sellers is shifting back towards the buyer, although Parisian owners are extremely “hardcore” in their ability to sit back and wait until the market improves (as we imagine it will if there is a change of government in 2017).
There has certainly been a growth in supply over the last year driven in part by prestigious properties sold by French sellers who are leaving France due to the new tax laws. There has also been a decrease in the number of buyers. However, those remaining on the market are very active and motivated by investment projects.
In Paris, we have observed a polarizing effect. Up to 2.5 million euros, properties are sold quickly because they prove to be accessible to both International and French buyers with comfortable means.
The market for properties valued over 5 million euros also remains very active, particularly international buyers (Eastern European, South American, Middle Eastern, Italian, etc.). However, it is interesting to note that properties valued between 2,5 and 5 million euros are more difficult to sell. They do not match the needs of typical French clients due to their price and are not “exclusive” enough attract very wealthy international clients, who are particularly demanding.
Prices on the Paris market have been relatively stable and no major change is expected in the next months as long as interest rates remain at their correct low levels. However, despite this general trend, a slight drop in prices (of about 10%) has been observed for properties that have some defects (1st floor, major work needed, lack of natural light, lack of an elevator, overlooked by another building, etc.). This is the case both for the Right Bank, where prices/m2 now range from €8,000 to €13,000, and the Left Bank, where prices vary between €13,000 and €22,000.