Luxury real estate: 2020, a surprisingly resilient year despite containment and the Covid-19 crisis

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Luxury real estate: 2020, a surprisingly resilient year despite containment and the Covid-19 crisis

Sotheby’s International Realty France - Monaco posts for the first half of 2020 its results which are virtually identical to those of last year. Alexander Kraft, its chairman, gives an extremely positive assessment of the first 8 months of the year.

"We were very surprised to note that our results for the first half of 2020 were practically identical to those of last year, and this despite the almost total cessation of notarial activity during the two months of confinement in March and April 2020."
ALEXANDER KRAFT, PRESIDENT OF SOTHEBY'S INTERNATIONAL REALTY FRANCE - MONACO

Our results for the first half of 2020 (435 million euros of sold properties) are practically identical to those of last year (449 million euros), and this despite the almost total cessation of notarial activity (and consequently of notarized transactions) during the two months of confinement in March and April 2020. In the second quarter, we made 157 sales throughout France at an average price of over 1.55 million euros, a sign of a particularly strong activity in the high end real estate.

A year 2020 as beautiful as 2019 despite a difficult context
This hyper-robust state of the market is mainly due to the activity of French buyers as, currently, foreign buyers have almost disappeared from the market, an inevitable result of various and unprecedented restrictions in terms of travel during this global crisis. It is then above all our French clientele who, following the deconfinement, returned to the real estate market without the slightest hesitation.

During the lockdown, our activity had turned into a virtual activity with a very pronounced interest of the French for the real estate of their country. Frankly, we weren't sure that this would turn into real transactions following the the lifting of lockdown restrictions but, from the post-quarantine period in early May, we were able to witness a real explosion of activity that has not stopped since.

Unlike other international crisis scenarios in the past, the market has recovered with unprecedented strength and, as there has been no decline in demand, we have not yet noted a decline in price pronounced following deconfinement. We're starting to see small negotiations in the order of 5%, sometimes 10%, for some goods with defaults or with sellers who are keen to close their deals quickly before a potential second wave of infection and / or containment.

Reasons for this success: three major motivations
We observed three major motivations. The first: the French want to “upgrade” their main residence by buying goods either with outdoor spaces (balconies, terraces, garden), or larger (additional rooms), or better located (quieter or greener). The second motivation is the new interest in second homes, in order to obtain a haven of peace, both practical and financial, for his family. The third is a change of life: some people leave the cities to settle on the outskirts, not too far from the city, to enjoy a better quality of life while enjoying the benefits of teleworking. At the same time, for all these buyers and others as well, these real estate purchases represent alternative investments which are considered to be safe bets, especially in times of crisis.

Success of prestigious real estate in Paris but also in all regions
This activity is clearly visible not only in Paris and in the metropolises but also everywhere in the regions, whether for main residences or classic second homes. We are seeing a return of French buyers in all the markets we cover, including the Côte d'Azur, Provence, mountain resorts (Megève, Courchevel and Chamonix), seaside resorts (Dinard, La Baule, Le Touquet, l 'Île de Ré and the Bassin d'Arcachon), the lake regions (Lake Geneva, Lake Annecy and Lake Bourget), country markets (Languedoc-Roussillon, the Basque Country, Brittany, Normandy) and of course the popular districts of large cities such as Bordeaux, Lille, Lyon and Nantes. Following deconfinement, this trend has grown even further with the desire to change the way you work and live. Despite the temporary scarcity of foreign clients, we remain confident in the very high-end market, in Paris and in the regions, because it remains supported especially by our wealthy French clients and our institutional buyers.

Agency openings planned in Pays d'Auge, Seine-Maritime and Paris
Faced with this very buoyant market, Sotheby's International Realty France - Monaco is in the process of further expanding its considerable presence in France with the opening of real estate agencies planned in Pays d'Auge, Seine-Maritime, Paris (9th arrondissement and 15th arrondissement) in the coming months. 20 years after the establishment of our first agency in Paris, we are now number one in the French luxury real estate market with 53 agencies across the country. We have recorded incredible activity since the start of the year despite a delicate context because the market is mainly supported by the French. This phenomenon should continue in the 3rd quarter as we already have 270 million euros of goods sold under contract at the moment.

Practical illustration
Here are some examples of recent sales ...

In Paris 16th (Georges Mandel), a magnificent apartment for 8 M €
In Biarritz, a superb apartment on the beach around 7 M €
In Neuilly-sur-Seine (Les Sablons), a 415 m² mansion with garden for € 5.35 million
In Caluire, near Lyon, a splendid mansion of approximately 475 m² with park, rehabilitated by a renowned architect, for € 5.25 million
In Nice, an apartment at the Palais Maeterlinck for € 4.6 million
In the Basque Country, in the village of Guéthary, a very well located villa around 3.5 M €
... and some examples of properties for sale

In Paris, in the 16th arrondissement, a mansion of nearly 650 m², with garden, located at Villa Montmorency for € 13.5 million
Near Montpellier, a Venetian madness that once belonged to the Saint-Exupéry family for € 6.9 million
In the Gulf of Morbihan, the private island of Roc’h Ar Hon for € 1.575 million

Source : Mysweetimmo.com  

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