Charles-Marie Jottras, CEO of the Daniel Féau-Belles Demeures de France group, Parisian leader in luxury real estate with some 110 employees, predicts a relatively serene future for the premium Ile-de-France market.
Le Point: How is the epidemic affecting your activity?
Charles-Marie Jottras: People are nervous, anxious, it's a bit of a mess. Everyone is taking things step by step, and pending further government measures we are between a rock and a hard place. The profession has asked the Minister of Justice to simplify the paperwork required to sign sales agreements. Much will depend on the President of the Republic's decision. We closed our agencies while ensuring that we could continue to offer our services to the public. Working from home, all of our employees are able to access their IT tools and, as far as possible, to continue business as usual. Since the Yellow Vests protests we have increased our ability to work at a distance.
Are purchases and sales of luxury assets coming to an end?
Many sales agreements will not go as far as the signing of the authentic deed for physical and legal reasons. Our clients cannot physically meet their notaries or assistants, and electronic signatures require special tools. Also some files are not entirely complete, lacking technical and environmental diagnostics, administrative documents and so on. Banks must also be able to transfer funds, and apartments must have been emptied which is often not the case as removal companies have not yet returned to work. We are in a status quo. Our website is visited half as often as usual...People's minds are elsewhere.
Prices, number of transactions… What scenario do you envisage for 2020?
The fall in stock portfolios will probably generate two opposite movements. Scheduled purchases in the short or medium term shall be put on hold, while on the other hand we may also witness an increase in incentive for some to invest in stone. During the financial and real estate crisis following the Lehman Brothers bank's collapse in 2008, signatures stopped for a month or two. Activity then picked up significantly in the first half of 2009, to some extent catching up on the decline. However we do not know how long this Covid-19 crisis will last. At best, we will lose two or three months of real estate activity, which would be by no means catastrophic. What is certain is that, like with the subprime crisis, the competitive environment will have thinned out by the end of the crisis. As far as prices are concerned, in Paris and the desirable suburbs nothing has changed regarding the deficit in supply and as a result prices should not drop too much, probably by less than 5%, and go into pause mode, in the same way, alas, as the current market.”