A decline may certainly be possible, but some believe that it will not be significant, even where properties with certain flaws are concerned.
The question, however, is whether Paris’s high-end real estate will manage to escape the expected fall in prices?
Opinions are divided. 'I expect prices to fall by 5% to 7% over the next 12 months', says BARNES Managing Partner Richard Tzipine. 'Unless there is a crash, prices will not fall significantly, regardless of the property profile, because vendors are faced with a burgeoning demand, especially as expatriates (from Europe and Asia) and foreigners (Germans, Swiss, Scandinavians and soon Americans) are preparing to return', explains Alexander Kraft, CEO of Sotheby's International Realty France.
That said, the market is indeed picking up again, with many vendors choosing to anticipate this drop in prices. 'We have so far recorded a 50% increase in mandates on 2019', Richard Tzipine says, 'with 42% of the properties on our books in the inner Paris region featuring a terrace or garden. This rate rises to around 70% in the Hauts-de-Seine area'.
A Parisian property that comes with a garden is, of course, the Holy Grail, but the tougher approach adopted by the banks since the health crisis has had a number of repercussions: fewer buyers or buyers more likely to adopt a wait-and-see approach. And of course, a drop in demand combined with even a slight increase in supply generally means a drop in prices.
That said, not all properties will be affected. According to experts, exceptional properties with unobstructed views, balconies or terraces and green spaces are still selling very quickly at prices as high as before the crisis.
The gradual return of expatriates and foreigners may also have something to do with this. 'In the 9th and 18th arrondissements we are seeing the return to London of expatriates who are currently stuck in Paris due to quarantine regulations', explains BARNES director (9th, 10th, 18th and 19th) Marie Bauchet, 'with Montmartre attracting the Italians and the Swiss in particular'. It remains to be seen whether this clientèle alone will be sufficient to avoid a price drop.
© Le Figaro Immobilier - published on Barnes Paris on 09/07/2020
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