Luxury real estate to improve in 2024, ahead of a "Trump effect" expected to be positive

After a gloomy start to 2024, following on from 2023, and a summer penalized by the organization of the Olympic Games and the dissolution of the National Assembly, the Barnes network "avoided the worst" thanks to a 30% rebound in its activity in the last quarter.

"We have experienced the longest real estate crisis in 25 years, it's been two years, and we are probably emerging from it," said Richard Tzipine, CEO of Barnes, during a press briefing, for whom luxury real estate remains "an absolute safe haven."

Between the drop in interest rates and a drop in prices of around 10% in two years in Paris, the signals are green.

The same tone was heard at Sotheby's International Realty, which ended the year with a drop of "only 7%" in its sales volume, despite the wars in Ukraine and Gaza as well as the uncertainty linked to the elections in France and the United States.

The higher average transaction price, at 1,8 million euros, offset the decline in network sales.

"It's been an extremely volatile year and it's really the last quarter that saved us," Alexander Kraft, Sotheby's CEO for France and Monaco, told AFP.

In addition to the traditional luxury markets of Paris, the Côte d'Azur and the ski resorts of the Alps, Sotheby's is seeing "a move upmarket in almost all other French regions, such as Normandy, Brittany and the greater South-West".

Departures of French people

Among the major trends, the agencies note a rebalancing of the balance of power in favor of buyers in a sector hitherto acquired by sellers, particularly in Paris where the supply is structurally deficient.

The energy performance diagnosis (DPE), which sets a timetable for banning the rental of thermal strainers, "is becoming a real issue, except for exceptional properties" and offers "more room for negotiation", also notes Richard Tzipine.

Charles-Marie Jottras, president of the Daniel Féau network, also confirms having "seen a ray of sunshine" in May, before the dissolution came to break this dynamic. He has noted since September "a new brightening of the market".

The reasons include prices that have continued to fall slightly on the family clientele market (1 to 3 million euros), but also the near parity of the dollar with the euro, which gives 10 to 15% additional purchasing power to buyers from the United States.

"We are gradually finding healthy, homogeneous, coherent, logical market data, which allows us to be more positive than ever," Barnes also assures.

The agencies also note a "small movement" of French people leaving for abroad since the dissolution.

"This trend had almost stopped since the election of Emmanuel Macron," underlines Mr. Jottras, evoking a feeling of "fiscal insecurity."

The outlook for 2025 is unanimously considered encouraging, especially since the election of Donald Trump to the presidency of the United States is seen as a positive signal.

"Trump supporters are particularly enthusiastic. They think he's going to solve the economic problems, they're hoping for tax breaks and they're really eager to spend money," Kraft said.

As for the opponents, "some say that they will perhaps settle for five years in Europe," he emphasizes, recalling that this effect also occurred during Trump's first election in 2016.

Although the Olympic Games initially froze transactions, Barnes notes a positive effect today with "a renewed attractiveness of Paris for American customers".

Despite the difficulties encountered, the agencies continued to sign record sales, often completed in 48 hours and at the advertised sale price, in particular for properties "without work" at more than 00 million euros, or even several tens of millions of euros.

Illustrative image of the article via Depositphotos.com.