Extension of the luxury sector
Timing is always key in real estate. The branch network Daniel Feau chose the week when no one publicly denounces billionaires in France to present its analysis of the Parisian luxury real estate market. And cocorico. Bernard Arnaultthe first fortune in the world if we are to believe the Forbes ranking, will be well surrounded as luxury is doing well in the capital.
Luxury real estate seems immune to the geopolitical and economic context. It suffers neither from the consequences of the war in Ukraine, nor from the sudden rise in interest rates, nor even from the threats of economic recession which loom over the year 2023. Figures from the first network of real estate agencies Parisian high-end properties show a solid increase in sales volumes, particularly in the segment of goods over €3 million, and demand that is not weakening, having almost doubled compared to 2019. It is more than 20,000 new prospects that the Daniel Féau network identified in 2022.
How can this enthusiasm for the capital be explained? Simply rarity. Paris is a city where we no longer build, whose housing stock in the upscale neighborhoods is frozen. And scarcity has a price. That of the average transactions at Féau exceeds 17,000 €/m2, in constant progression since 2019, when the notaries note a drop in the average price in the capital to 10,630 €/m2. As soon as you add an outdoor space (terrace or garden), the average price per square meter goes up by 25%. If you are looking for a large area, you will have to accept an average surcharge of 32%.
If a national and international clientele can afford this rarity, it is not the same for ordinary mortals. And yet, everything has been done for years to maintain this shortage. Often with good intentions at the start. Between the new environmental standards that will remove energy sieves from the market, the desire to cap rents, the constant tax relentlessness on real estate… the real estate investor has taken to their heels. The institutional will always have less risk on the French 10-year OAT or the German Bund than on a building dotted with beautiful neighborhoods. The individual will be able to find the virtues of the booklet A which will bring him 3% from February, unexpected return in Parisian residential real estate.
A signed platform Robin Rivaton and Vincent Pavanello published this week in The echoes aptly points to the government’s failed supply shock. At the end of a reasoning that deconstructs the myth of the 500,000 housing units to be produced each year in France just as much as the 200,000 put forward by the chief economist of Bercy, the two specialists estimate the housing needs of the Ile-de-France population at 7 million. units by 2030. The stock today is… 5.9 million. Multiply by the ten largest regional cities and you will have more or less the equation to which the CNR Logement must work. From now on, because we no longer have the luxury of waiting.