The surprising effects of covid on prestige real estate

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The surprising effects of covid on prestige real estate

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Posted on 26/03/2021

In this year affected by the coronavirus crisis, while most sectors of activity have been severely affected, the prestige real estate sector is holding its course and does not seem to be in difficulty in the face of this crisis. This year has also seen an increase in sales, particularly in the inner and outer suburbs of Paris and the surrounding area.

Luxury real estate, increasing sales in the midst of the crisis

The figures from the luxury property network Sotheby's International Realty France - Monaco are surprising. In fact, despite the health crisis, the company has seen its sales increase by 10% compared to the previous year on high-end properties.

The president of Sotheby's International Realty France - Monaco, Alexander Kraft, underlines the new interests of the luxury real estate clientele, caused by the confinement. Indeed, these months of confinement have developed a crying need for space and to secure their money. This explains the increase in sales after the confinement. Wealthy clients flocked to second homes, or a new, larger home with outdoor space. Also, with the downturn in many sectors, buying property was the safest way to invest. All of this information can be seen in the results for the year 2020 of the Sotheby's International Realty France - Monaco network, in fact, their total cumulative sales are 1 billion euros, 5.5% higher than in 2019.

Sales boosted by containment

Alexander Kraft once again emphasises that containment has had an impact on the desires of the French: "Containment has made it possible to generalise teleworking and has strengthened the desire of the French for space and greenery. In total, we have identified three main trends among our clients: those who move for more space, more peace and quiet or an extra exterior, those who buy a second home from which they can telework and enjoy it more often and finally those who change their life completely by leaving the big cities for more peace and quiet. However, he also points out that if the flats are not impeccable, i.e. in good condition and at a reasonable selling price, sales become more complex and prices may fall. Nevertheless, a property with an exceptional feature will be sold at the price, sometimes without negotiation.

A blissful vision for 2021?

This year, 2020, has raised a new issue, that of the price cap for defect properties. Prices have started to stabilise or even fall for the reasons mentioned above. However, sales of second homes do not seem to be affected by this effect. Also, the closure of the borders has limited sales with foreign clients, which was the usual clientele of the network. However, methods have been put in place to overcome this problem such as virtual visits, which have resulted in some sales.

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