Buying a luxury apartment in Paris: What's the state of the market?
Propriétés Le Figaro.fr - By Maya Dujardin, october 13th 2020
Lockdown may well have given you itchy feet, and the idea of buying a luxury apartment in Paris has become a constant niggle. It’s time for an update on the state of the market.
WHAT MAY BE CONSIDERED A LUXURY APARTMENT IN PARIS?
A number of criteria determine whether an apartment is "just" a quality property or whether it may be considered to be in the luxury segment. "On an international scale, upmarket real estate is generally defined as having a value in excess of 1M$" explains Nicolas Pettex-Muffat, managing director of Daniel Féau / Belles demeures de France. “In Paris however, when it comes to real estate 1M$ is barely enough to approach the luxury segment.
Paris, with its stock of remarkable apartments and private mansions, is one of the fifty or so cities in the world which attract a significant number of international buyers. In this market there is also the top-of-the-range category which concerns transactions with prices exceeding 4M$ and a price per sqm that is over 1.8 times the average observed in the market, in the same sector and across the range of properties.”
Consequently, in a neighbourhood where properties usually sell for around 10000€/sqm, some exceptional properties are marketed at around 18000€/sqm, and sometimes even more.
"One specific example comes to mind" says Nicolas Pettex Muffat. “In the same building we recently concluded two sales, one at 11300€/sqm and the other at 49000€/sqm. The difference? The unique character of the more expensive of the two... Located in one of the most prestigious areas in Paris and acquired by a French national, the apartment in question boasts a magnificent terrace benefiting from no facing neighbours and commands a picture-postcard view of one of the capital’s most iconic landmarks. Truly unique! Think of it this way…if 75000 copies of a lithograph exist, the value of each won’t amount to much. If however in a limited series of eight, four copies were to be destroyed the value of the remaining four would rocket. In the ultra-luxury segment, the purchaser’s behaviour is in many ways similar to that of a collector."
LUXURY APARTMENTS IN PARIS: RARE, AND SOLD AT HIGH PRICES
What is special about the Parisian luxury market? "For over 2 decades nothing has been built in the capital’s most prestigious districts” explains Nicolas Pettex Muffat. “Stock is frozen in the central districts, and apartments with exceptional character are being sold at very high prices. In the capital’s most desirable neighbourhoods, a beautifully appointed character apartment benefiting from an extensive balcony, a terrace or a garden is a rarity.
And if, as a cherry on the cake, the apartment also boasts a stunning view of an iconic landmark, it can be considered to be exceptional, or even unique. Don’t forget that only up to a hundred or so apartments are sold for over 4M€ each year in Paris ... and that’s in very good years!"
LUXURY REAL ESTATE: SUPPLY AND DEMAND MORE UNBALANCED THAN EVER
During lockdown, Parisians became increasingly aware that home is where the heart is, and for many this prompted them to look elsewhere for their home sweet home. As soon as lockdown measures were eased on May 11th, the luxury real estate market rebooted, with figures superior to those over the same period in 2019. The Daniel Féau group recorded an 8% increase in the number of transactions… new sales and acquisitions, not projects put on hold during lockdown.
As luxury apartments in Paris are rare, exceptional properties quickly find buyers and the traditional structural imbalance between supply and demand persists. And it's a safe bet that this situation will intensify once foreign buyers are again able to travel. “For the moment, although foreign buyers are very active online, they are physically absent” observes Nicolas Pettex Muffat, who adds “and whatever the cost, a potential buyer will always want to visit before making a decision!”
