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Market analysis
28/05/2020
The impact of COVID-19 was felt strongly over the first three weeks of the crisis, during which the property market was literally put on hold.
Subsequently, in early April, BARNES noted a pick-up in demand through an increase in leads on its website, allowing the company to anticipate a successful exit from lockdown by rolling out an unprecedented digital package.
In five years (between 2015 and 2020) sales volumes and property prices have respectively increased by 15% and 30% in Paris, according to BARNES’ analysis. “The market was so dynamic that we are expecting a potential housing bubble, contained by access to bank credit on favourable terms, extremely low rates and the extension of loan durations”, explains Richard Tzipine, Managing Partner of BARNES. Even though there has been a tightening of loan conditions since the end of 2019, rates remain low and the upscale clientèle is continuing to invest.
Despite the COVID-19 crisis, buyers remain confident in the value of Parisian real estate. “The announcement of the end of lockdown on 11 May reassured buyers and vendors who got back in touch with BARNES to organise in-person viewings as soon as lockdown was lifted. Even though projects had to be put on hold due to the uncertainty, most clients are putting their projects back on track”, says Richard Tzipine. As at 17 March, BARNES had recorded 200 sale agreements, 17% of which were completed thanks to remote signature. What’s more, BARNES also had 140 pending offers, 25% of which have been transformed into sale agreements.
Demands may have changed, but the Parisian property portfolio continues to satisfy all types of buyers. “Now more than ever, Parisian real estate is a physical haven”, adds Richard Tzipine. Families will be looking for bigger properties with space for everyone (children, parents and grandparents) and with an exterior for that breath of fresh air while staying within lockdown rules. Investors, for their part, are still showing interest in the smallest surface areas.
“Whether in La Baule, on the Ile de Ré, Arcachon Bay or on the Basque coast, the luxury property market on the Atlantic coast has not been affected by the health crisis either. Luxury real estate appears to be holding up against the crisis and is even becoming a safe haven”, says Etienne de Gibon, Associate Director of BARNES Nantes-La Baule, which is expecting strong performances in May and June.
“Along the coast, the home office has become the new norm and is even taking precedence, so our clients are looking as a priority for properties with a space that can be used as a temporary or permanent office”, explains Thibault de Saint Vincent, President of BARNES. Demand for luxury properties continues to outstrip supply despite the crisis. The market remains in a class of its own both in terms of the rarity and uniqueness of the properties as well as the low number of annual transactions. Etienne de Gibon emphasises that “at exceptional destinations, you don't buy a property, you treat yourself to it”.
“This health crisis has helped us to question our processes and improve them, both internally and more generally in how we work with other professionals in the sector, like with notaries using remote signature, for example. The array of digital tools created and implemented in recent years has had a big role to play in this”, says Richard Tzipine. While the global trend showed a 30% drop in April in online property searches in general, interest in luxury real estate had not fallen.
“April confirmed the pick-up in business, with more visitors and more page views/session on the barnes-international.com website compared to March. All the qualitative indicators are positive with time spent per visit exceeding 4 minutes and a bounce rate below 25%, which is the sign of a qualitative audience”, emphasises Thibault de Saint Vincent. Regular visitors remain faithful to the site, the organic proportion of which (that is to say all connections to the website excluding PPC campaigns) was up +10% in April, thus confirming the resumption of property searchers. Sunny destinations like Biarritz, Lisbon and Saint-Tropez have also fared well.
In addition, the systematisation of digital viewings has made it possible to compensate for lockdown in the way in which properties are presented. Live appointments have allowed consultants to show apartments to buyers using their phones and to answer questions directly. “These ‘live’ viewings have also made it possible to confirm sale agreements, when the buyer has been able to physically view the property before lockdown”, adds Richard Tzipine.
© Businessimmo.com - published on Barnes Paris on 28/05/2020
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