In luxury as for the rest of the market, 2018 has been a beautiful real estate year. For the coming year, here are the rising cities and sectors and new ways of doing business for buyers and sellers of this muffled environment.
All real estate professionals agree: 2018 was a very good year after an exceptional 2017 vintage and in the niche of luxury, it was even better. Sales volumes rising sharply, average prices climbing … "French luxury real estate has fully played its role of safe haven", according to Laurent Demeure, President of Coldwell Banker France and Monaco during the presentation of the annual report of his sign. No foolish optimism as the network now notes a significant decline in the average budget envisaged by its customers, from 1.55 to 1.33 million euros. A decline of 15% that Laurent Demeure interprets possibly as the end of the anticipation of the price increase by the buyers.
The year that begins is marked by many uncertainties, including the type of Brexit to which we are heading but also on possible developments in real estate taxation in connection with the opening of the Great National Debate. In the midst of his doubts, the brand has however made some bets on the trends 2019.
1) And if the heart of Parisian luxury rocked right bank?
Undetectable left bank? Not so sure. If the 6th district of the capital remains firmly the most expensive of the capital (to 13.010 € / m² according to the figures of notaries), the 7th is already out of the top three, ahead of the 4th and 1st arrondissements (12.340 € / m² against 12,750 € / m² and 12660 € / m²). A "historic heart" of Paris which would become one of the most attractive districts of the capital, according to Laurent Demeure recalling that the prices of the 1st jumped 25% in 5 years and that it is in this sector that the animation local and business health is the strongest. "More Paris becomes a global megalopolis and more, paradoxically, we look for a village life," he says. And this village would be better embodied by the right bank. Bet to follow.
2) Non-residents are back
The movement started in 2018 should continue. It mainly concerns French people who do not want to have their main residence in France for tax reasons (the IFI would then touch their other properties abroad) but are interested in French stone. They are mainly settled in the United States, Belgium, Luxembourg or Switzerland and left the country after the election of François Hollande. Their budget? From 2 to 4 million euros for a pied-à-terre or even 5 to 30 million for an investment.
On the side of foreigners, the Americans are interested again in Paris while London falls and that the prospects of New York are bad. The Middle East clientele, which was very active in London, is also looking at Paris. Foreigners who would not, for the moment, not really scalded by the phenomenon of "yellow vests".
3) Limited impact of Brexit
According to Laurent Demeure, Brexit would ultimately be the source of a flow of "constant and moderate" arrivals. While acknowledging that there have been no massive arrivals of management teams from London, the sign expects larger arrivals this year. Especially to the extent that we risk heading for a hard Brexit but, conversely, the French social climate worries the Anglo-Saxon banks. Brexit customers are currently mainly interested in family apartments located on the left bank or in the north of the 16th arrondissement for budgets between 1.8 and 4 million euros.
4) New York bothered, London stopped, questions about Geneva
With the progressive delivery of apartments in the new Hudson Yards neighborhood, more than 20,000 new apartments will be on the New York market this year. At the current rate of sales, it would take more than 6 years just to sell this new shipment. Coldwell Banker recalls that it took 447 days on average to sell more than $ 4 million in the "Big Apple" in 2018.
For its part, the British capital is at a standstill. Between uncertainties on Brexit and rising taxes, transactions should fall to a low point. In these circumstances, the brand is relying on an amazing underdog: Geneva. The Swiss city could indeed appear as a post-Brexit alternative in Paris if the Swiss Confederation signs an agreement, currently on the table, with the European Union. Among the new assets of Geneva: a future railway connection with the border and the transformation project of the most important industrial area of the city into a mixed district.
5) Buyers who want to know more
While multi-million-euro luxury purchases can always respond to an irrepressible crush, buyers have an increasingly professional approach to their acquisition. "These buyers want a transparent history of the property, they peel the minutes of general meeting and claim to know the price at which the seller had bought the housing, explains Laurent Demeure. Opposite, many French sellers are still used to communicating only the minimum amount of information. "