Luxury real estate: Is the market euphoria really unfazed?

It has been several months now that we see writing that luxury real estate is not experiencing the crisis. Sotheby's International Realty France Monaco has indeed recorded an "unexpected historic record year", with 1.61 billion euros in sales, despite a sharp slowdown in the 4th quarter of 2022. Alexander Kraft, the Chairman and Chief Executive Officer, is delighted with these results which "are above what could be expected and show that the luxury real estate market remains a safe haven and an alternative investment in difficult times". Several very good sales have made it possible to reach such a figure, in particular in Paris where Paris Ouest Sotheby's International Realty carried out a transaction at 30 million euros. "We had more than 60 transactions between 5 and 50 million, in a very high range" notes Alexander Kraft. Thanks to the lifting of health measures, foreign buyers are making a comeback: Europeans on the one hand, represented by the Germans, Swiss and Scandinavians, and Americans on the other, who have higher budgets than French and who benefit from the strengthening of the dollar against the euro.

However, the negotiations are starting to get tougher, whether it is a good with defects or not. In addition, some files do not come to fruition due to funding problems and supply is beginning to become scarce in the face of significant demand. “We see a two-speed market emerging on the horizon. On the one hand, the "normal" prestige market dominated by the French, which will slow down due to files blocked by the banks and lower client liquidity, and on the other, the high-end prestige market which is holding up better. current challenges because it is supported by informed investors with significant liquidity and a desire to benefit from alternative investments" explains Alexander Kraft.

The search for calm and greenery that marked the year 2020 following covid and the confinements began to run out of steam in 2021, even more so in 2022. Buyers are once again turning to the social life of large cities such as Paris and its suburbs. This has enabled Paris Ouest Sotheby's International Realty to achieve very good sales in the west of Paris, in the Hauts-de-Seine in Neuilly-sur-Seine, Boulogne-Billancourt or even Saint-Cloud, and in the Yvelines in Versailles and Saint-Germain-en-Laye.

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