Despite challenges from COVID, French luxury markets remain resilient in 2021
According to international real estate consultant Knight Frank, despite three national lockdowns, a delayed vaccination program, closed borders and residential sales halted for several weeks in the second quarter of 2020, the main French residential markets saw prices rise by 1.3% on average in 2020 and cumulatively. sales increased 5% in the six months ending February 2021.
Stimulus measures – â¬ 604 billion in additional spending coupled with low mortgage rates over 50 years, allowed homeowners to move or buy a second home during the pandemic at a relatively affordable cost.
Kate Everett-Allen, Partner, Residential Research at Knight Frank, commented: âFrench buyers dominated sales in 2020 as outbound travel bans dampened overseas demand. Indeed, in 2020, 60% of the first-rate sales agreed in France by Knight Frank were to overseas nationals based in France, this is the highest on record. However, once the borders reopen, we expect demand from overseas to increase.
Although Paris has been hit hard by the pandemic, preferential prices in the capital fell only 2.3% in 2020, and official data suggests there has been only a small increase in the number. of households moving from central Paris to the suburbs. Supply constraints, as well as large infrastructure projects, including the Grand Paris project, Europe’s largest transport initiative over the next decade, and the Paris 2024 Olympics will support future growth. prices in the capital.
On the CÃ´te d’Azur, although French and Monegasque buyers have filled the void left by international buyers restricted by Covid, most markets have seen prime prices hold steady. The pandemic-induced demand for outdoor spaces has seen the demand for villas increase to the detriment of apartments and âre-roofingâ has become a key element in the demand for prime properties; French people previously residing abroad now choose to settle in the south of France because of the lifestyle on offer.
The French Alps benefited from the âcall of the great outdoorsâ during the pandemic. Some 26% of European wealth advisers responding to Knight Frank’s attitude survey in The Wealth Report 2021 said their clients were more likely to buy a ski house due to the pandemic. Prime prices increased by 2.5% on average in 2020 in the Alps, with the resorts of MegÃ¨ve (4.5%) and Chamonix (3.5%) recording the largest increases.
Provence has been the busiest of all of Knight Frank’s European markets since the start of the pandemic, both in terms of property surveys and sales. The growth in preferential prices accelerated in 2021, increasing by 5% in the first five months of the year, as a shortage of supply and strengthening demand exert upward pressure on prices. The green spaces, views and well-being of the region explain its popularity in today’s climate.
Not buffered by the pandemic, the Dordogne region and neighboring Gers saw their sales increase by 3% during the year until February 2021. After a 30% drop in base prices in terms of peak at Through as a result of the global financial crisis, prices followed higher but at a slower pace than neighboring regions. The start of work on a TGV line in 2024 which will link Paris and Toulouse with a stop in Bordeaux, will reduce travel times from Paris and make the region more accessible.
Mark Harvey, Partner, International Sales Manager at Knight Frank, said: âIt will be a sellers market in France until early 2022 as pent-up demand increases, then we will see the usual seasonality return to the market. market and the exuberance of recent months have died down as the May 2022 presidential election approaches. “
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