(AFP) – Luxury knows no crisis. High-end real estate, driven by the most expensive properties, broke new records in 2022, according to the reports of prestige agency networks.
War in Ukraine? Interest rates going up? The upheavals of the stock market? “That for us, that did not exist.” Charles-Marie Jottras, president of the Daniel Féau network, sets the tone.
In 2022, this Parisian specialist in luxury real estate had another historic year, following 2021 which was already breaking records.
While real estate prices in Paris have been generally eroding for two years, those of the most expensive properties continue to climb. In 2022, the average price per square meter at Féau thus exceeded 17,200 euros.
Same observation at Sotheby’s International Realty, which in 2022 beat its previous record achieved in 2021, with 1.61 billion euros in sales volume. At Barnes, “we had the best year we have ever had,” Richard Tzipine, managing director of this network, told AFP.
– Wealthy foreigners –
The reasons for this success: the return of foreign buyers, with the end of sanitary measures in many countries.
Alexander Kraft, CEO of Sotheby’s for France and Monaco, describes two waves of arrival in France: first Europeans, then Americans, whose strong purchasing power has been further boosted by the strong dollar.
“They’re very motivated by the strength of the dollar right now, and this investment aspect, because Americans are quite obsessed with inflation,” he told AFP. And this executive expects to see “even more” US buyers in 2023.
In Paris, Barnes noticed that the areas most popular with foreigners, such as the Marais or around the Arc de Triomphe and the Eiffel Tower, were the most in demand.
“It feels like there has been growing anxiety for years, and it feels like real estate is protecting you by securing your investments,” comments Richard Tzipine.
He has, for example, seen an influx of Lebanese wanting to escape the crisis in their country of origin.
At Féau, the proportion of sales involving at least one foreigner jumped in 2022, particularly for the most expensive goods.
– More and more expensive –
All the luxury real estate networks interviewed by AFP make the same observation: the more expensive it is, the more popular it is.
Barnes notes that in Paris, properties over 3 million euros sold much more.
And at Sotheby’s, in France and Monaco, “we had more than 60 transactions between 5 and 50 million, in a very high range”, notes Alexander Kraft.
“The more we go up in price, the more we are disconnected from what we hear: + Paris loses its superb + …”, remarks Charles-Marie Jottras.
“In luxury, we have an exploding volume,” also noted the general manager of Daniel Féau, Nicolas Pettex-Muffat. “Apartments with a garden or terrace are snapping up, and are snapping up more and more expensive,” he adds.
Why this good health of luxury real estate, when the real estate market in general is starting to show signs of slowing down, under the effect of rising interest rates?
“There is a kind of cap above which you are less sensitive to interest rates”, explains Richard Tzipine. “You have the ability to acquire expensive goods without compromising yourself, and taking advantage of a situation where others who are less fortunate and more interest-rate sensitive will not be able to acquire them.”
