Prestige Real Estate: Focus On Trends For 2019
If French real estate has been doing well in recent years, it is partly thanks to the contribution of the sale of luxury properties. 2017 was a good year, but 2018 was even better in terms of accounting. Although the average budget allocated by customers has declined, the market is still lucrative. 2019 is once again a prolific year for the prestige real estate market. Let’s look at the luxury real estate trends for 2019.
In early 2013, the departure of some French for tax reasons had impacted the luxury real estate market. These fortunes no longer invested in French stone. However, since last year, the second home market in France has revived. It is always French expatriates in Switzerland, Luxembourg, Belgium, England or the United States who invest in listed properties. 70% of buyers in Paris are French.
The budget varies according to the nature of the purchase: second home as a pied-à-terre or long-term investment. We also note that there is less and less shopping crush. Buyers learn much more about the details around the sale, the history of the property, its potential for profitability. It is less about an emotional purchase but more about a rational purchase.
In France, prices may continue to rise. If the rise was 10% last year, it should slow slightly this year. We expect a growth of about 5% for this year 2019. These figures seem impressive, however we must put them in perspective with the significant declines of the early 2010s. On the Côte d’Azur, the market of the sale or lease of prestige properties remains very active. Cities like Cannes or Mougins participate in this dynamic thanks to their location and affordable prices. Potential buyers from Northern Europe are increasingly interested in villas on the Côte d’Azur.
France is once again a privileged destination for foreign investors. Previous years favored cities like New York, London, Geneva. However, Paris is back in the top rankings thanks to a favorable international context. The fuzzy situation around Brexit and future tax measures in the UK is holding back foreign customers. Investors in the Middle East would now tend to favor Paris in London. Meanwhile, New York is struggling to sell its new housing stock in the Hell’sKitchen, Manhattan.
The slower pace of the luxury real estate market is somewhat immobilizing New York activity. For 2019, the main competitor of Paris seems to be Geneva. The Swiss city could take advantage of British customers hesitant against the Brexit. An economic agreement between Switzerland and the European Union could endow Geneva as one of the most popular cities for luxury customers.
2019 is therefore a prolific year for the luxury real estate sector. France is repositioning itself as one of the flagship countries of prestigious properties, thanks in particular to Paris.