After the Covid crisis, "everyone wanted to change their lives by alternating residence in the city and in the countryside", leading to a surge in prices on the luxury real estate market, recalls Alexander Kraft, CEO of Sotheby's Realty France.
But the war in Ukraine, inflation, then the escalation of interest rates caused a slowdown in the market in 2023, he continues, however judging the year to be “excellent”.
Because if Sotheby's Realty saw its sales volume drop by 7% in 2023, the latter remains 2% higher than 2021, the previous record year, with nearly 1,5 billion euros in revenue.
Certain sectors have suffered more than others, such as the communes of western Paris and their traditionally family clientele, reports the Daniel Féau agency network.
“Average Parisian prices, all types of property combined, which were 17.236 euros/m2 in 2022, have fallen,” notes its president Charles-Marie Jottras, for whom 2023 marks “a reversal of the balance of power between buyers and sellers, after several years where the seller ruled the roost.
The violent rise in interest rates in 2023, according to him, served as a trigger for a clientele who certainly “almost did not need to borrow to buy” but who wanted to “take advantage” of it to buy at the drop.
Untouchable, the very high end of Paris always soars at more than 10 million euros, with prices "sometimes well above 30.000 euros per square meter", notes Daniel Féau.
“From 4 or 5 million euros, the market has remained stable. The higher we go in prices, the more dynamic the market is,” confirms Thibault de Saint Vincent, president of Barnes.
“Buy gold”
A safe haven in times of crisis, prestigious real estate allows wealthy investors to escape inflation, experts point out.
“We achieved twice as many sales above 10 million euros on the Côte d’Azur in 2023 as in 2022,” underlines Thibault de Saint Vincent.
“In Paris, as soon as you have a top-notch property, like a private mansion on the Champ-de-Mars, you have four or five buyers. For them, it’s a bit like buying gold,” continues -he.
This is all the more true in Paris, where the luxury supply is structurally lower than the demand.
Barnes, who analyzes each year the aspirations of the 395.000 "super-rich" whose assets exceed 30 million dollars, notes a development of "nomadic entrepreneurs".
In search of "geographic freedom" but also "soft taxation", this population is ready to work "from anywhere in the world" by taking family and children there, and buys "several residences, semi-main or semi- secondary".
This nomadism gives rise, according to Barnes, to a craze for places formerly reserved for vacations, such as seaside or ski resorts which “live all year round”.
“There is a three-speed market,” analyzes Alexander Kraft. An international market with Paris, the Côte d'Azur and the mountains, which he says is doing "very well", a "calmer" market for second homes in upscale resorts (Biarritz, Dinard) and a "more affected" market for main residences in large provincial towns.
Another characteristic according to him, buyers are "increasingly selective", demand "perfect goods" and do not hesitate to negotiate "very aggressively" as soon as there is a defect, which can cause prices to drop by 5 to 20%.
French buyers still represent 70% of Sotheby's clientele, compared to 50% before Covid, but foreigners are returning, particularly from the United States and northern Europe.
In 2024, experts hope for a more pronounced drop in prices to boost sales. “We all understood that the year 2022 until the beginning of 2023 was a peak, and that we will have to accept going back down a little,” notes Thibault de Saint Vincent, who sees this as the return to “a healthier market ", with goods that will sell "at their fair price".