The reality of the luxury market is facing buyers
Sales : The reality of the luxury market faces buyers
A discrepancy is observable between the perception that buyers may have vis-à-vis the reality of the prestigious real estate market. Indeed, these discrepancies were highlighted by a study carried out by Belles Demeures during the month of June 2020, focusing on the properties sought, the evolution of prices in luxury on certain areas where prospecting is carried out.
Is the value of prestige goods falling?
To this question, it is clear that no, prestigious properties are in no way impacted. Despite a tightening of the conditions for obtaining mortgages at the beginning of 2020 and the economic crisis linked to the Coronavirus, only first-time buyers and young and modest households have been restricted in their investment power. Customers targeting high-end products have therefore had little impact, in no way disrupting transactions in the coveted districts of Paris, showing the strong resilience of the prestigious real estate market in the face of the health crisis.
However, it is possible to note an anticipation on the part of 75% of people wishing to acquire a luxury property on a potential deterioration of the French economic situation over the coming months. In contrast, only 20% predicted the deterioration of the French economy. For comparison, now 63% of the workforce surveyed is positioned on a decline in the prices of prestigious real estate over the next 6 months. Of these, two-thirds expect a reduction of at least 10%. Currently, 28% of respondents believe luxury property prices are realistic compared to 37% in 2019.
However, the physical reality of the terrain of this market can easily make these forecasts seem distorted. Indeed, rather than falling, the value of luxury goods continues to rise, accompanied by indicators to assume a future increase without retreat. Noting that 55% of future buyers of luxury properties want to maintain their level of investment with 18% planning to increase their investment in luxury real estate.
Investors have made it possible to return to their fundamentals, placing real estate investment in France as a safe bet that can be fully enjoyed.
What direction is the market for luxury real estate taking?
During the period of confinement, it was noted by the statistics of the sites Lux Residence and Belle Demeures a significant increase in research on prestigious properties. The desires for nature and space being at the heart of the research, we can see a certain enthusiasm on the part of households not living in a housing adapted to this kind of situation. For example, over the month of April between 2019 and 2020, the study conducted shows an increase of 130% for the Breton region and 115% for the Centre-Val de Loire region on research concerning prestigious properties. Returned to normal once the deconfinement of May 11 was completed, for a renewed interest in luxury pied-à-terre located in the beautiful districts of Paris. Corresponding, for the capital and its periphery (the West of Paris in particular) to 29% of searches on prestigious properties for 13% prospecting towards the Côte d'Azur; with an increase of 10% between April and June, from 48% to 58% for apartment searches.
Transactions have picked up significantly in high-end real estate in particular holiday resorts and in international cities, with Paris fitting in, with a potential 5th year of increase in prices and the number of transactions.
- A significant increase in searches on prestige properties.
- Enthusiasm on the part of households not living in housing adapted to this kind of situation.
- Transactions have resumed significantly in high-end real estate in particular holiday resorts and in international cities, with Paris being part of it, with a potential 5th year of rising prices and the number of transactions.
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Posted on 21/10/2021 by
Andy LECUYER
