- House prices rose 5% year on year to Q1 2020
- New house constructions expected to contract 9.4%
- Luxury properties sold every three days
Today is the French national holiday, Monash and Flinders University experts wrote in The Conversation and the ABC, English speaking countries will know it as Bastille Day, but the French know it as Quatorze Juillet.
Nonetheless, it is a chance to talk French property.
A resilient market?
No mention of mansard roofs nor Haussman’s renovation of Paris today, but across Global Property Guide (GPG), Paris Property Group (PPG), Christie’s Real Estate, and Knight Frank, among other sources, the French market was reported to be resilient despite pandemic.
Cushman & Wakefield even noted the office market “saw optimism” on the horizon as France makes its recovery from the woes of 2020.
GPG reported that metropolitan France house prices rose by 5% year on year to Q1 2020, and construction rates fell, predicted to contract 9.4% this year.
Sales were a mixed bag, Knight Frank reported that while residential sales mostly dived when the pandemic hit, annual sales volumes are now up 5% between August 2020 and February 2021. GPG data confirmed the trend, existing home sales fell between April 2019 and 2020 by 1.2%, and new home sales tanked 32%.
Just like the rest of the world, money is cheap, the French Government deployed €604 billion in additional spending and liquidity support, and the Bank of France noted mortgage rates are at a fifty-year low (1.11%).
Top-end of the market
CEO of luxury real estate companies Daniel Féau Conseil Immobilier and Belle Demeures de France, Charles-Marie Jottras told Christie’s International Real Estate that while there was a decline in sales for properties between €1 million and €3 million (A$1.58 million to A$4.74 million), assets above €3 million were a different story.
“In this segment, our agencies in Paris achieved a sale every three days, with an average price of €4.97 million (A$7.87 million)”
Charles-Marie Jottras, CEO of Daniel Féau Conseil Immobilier and Belle Demeures de France
You can probably tell why that’s the case, Knight Frank reported the number of ultra-high net worth individuals* (UHNWI) in France will increase 53% by 2025. Currently in France, the report said there are 51 billionaires, 15,503 UHNWIs, and 2,554,936 millionaires.
Why purchase Parisian?
Knight Frank reported buying in Paris was driven by people looking for high quality education, and those looking for either an investment asset or just to enjoy the lifestyle.
The top three professions and sectors taking up a Parisian lifestyle include startups, finance, and industry managers, with only 15% of sales made up of overseas buyers.
The report also noted neighbourhoods to keep an eye on included a small village in between the 9th Arrondissement and Pigalle, and the 10th and 11th Arrondissements.
*UHNWI is defined by Knight Frank as being worth more than US$30 million, including primary residence.