Real estate: the luxury market is doing well despite the covid-19 crisis
BOURSORAMA PATRIMOINE
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During the Covid crisis, the figures for luxury real estate have taken a surprising direction, indeed we are seeing an increase in them. While the Covid has globally harmed all sectors, luxury real estate does not seem to be affected by the crisis, at least not negatively.
Very luxury real estate is following a good trend with very satisfactory results. The absence of a foreign clientele has been mitigated by the presence of a French clientele anxious to invest its money and to air out.
During this global pandemic, real estate for the wealthy is on an upward slope, with historic records on the horizon. Despite a significant drop in the number of foreign buyers, the number and amount of transactions is only slightly impacted.
The pandemic as an accelerator
The Covid crisis has prompted French buyers in particular to rush into prestige real estate with two main motivations," explains Alexander Kraft, CEO of Sotheby's International Realty France. In fact, he observes various reasons linked to this rebound in sales, notably the need to secure one's financial assets, but also to look after one's personal well-being by taking advantage of more space.
Sales figures vary according to the size of the transactions. Indeed, properties sold between 1 and 3 million euros will see their prices stable but demand will fall. On the other hand, when the 3 million euro threshold is exceeded, sales increase at the same rate as prices. For example, the Daniel Féau luxury real estate network has recorded an increase of 9.2% for this type of property.
2020, a record year
On Avenue Montaigne, there is a prestigious property sold at 45,000 euros per square metre. This sale really symbolises the tone of the luxury real estate market in these times of crisis. It is a new record.
When you leave the capital, an astonishing phenomenon occurs. While the absence of a foreign clientele could make one fear a drop in sales, the rich French clientele maintains the figures for luxury real estate. In fact, the confinement has made a good number of French people realise the need for an extra room, an outdoor space, or even a second home. Alexander Kraft underlines "a never-before-seen interest in prestigious residences in the region" as well as "a desire for space and greenery".
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