After difficult years in 2022 and 2023, the high-end real estate market has recovered dynamically since January, according to the findings of the Barnes network, which specializes in prestige properties.
Luxury continues. “THE high-end segment did better than resist”, even estimates the prestigious real estate company Barnes, which presented an overview of the market and its results on Thursday 27 June. But as the legislative elections approach, the actors are worried: Thinning may be short-lived.
After two difficult years, with a slowdown due to rising interest rates, the market is doing better. At the height of the crisis, at the end of 2023, Barnes’s revenue had fallen by 20% in a year. But it is getting back on track with a “satisfactory” first quarter of 2024. In the second quarter, revenue even increased by 11% compared to the same period of the previous year.
“Since January, shoppers have returned, and two-thirds of them are new customers who were not previously listed on our records,” said Barnes managing director Richard Tzipine.
The resilience of the luxury market “confirms its status as a safe haven in the eyes of French and international customers”, even believes the group’s president Thibault de Saint Vincent.
Furthermore, this market is less sensitive to interest rates, because some buyers can pay in cash, without resorting to credit. Even for second homes, buyers are less rational, less attentive to the price per square meter, according to Richard Tzipine.
Demanding buyers
In a context where buyers have greater control over the market, they are still very demanding. According to the company, the goods in perfect condition and corresponding to the specifications have decreased very little, or even increased, in a year. On the contrary, the price of those with defects has dropped by 10 to 20%.
“It is more essential than ever to settle in the most beautiful locations, with impeccable properties offered at the right price” explains Thibault de Saint Vincent, president of Barnes.
After the explosion of prices in the post-Covid period, the time has come for a rebalancing of the prestige goods market. But depending on the regions and territories the activity is not the same. Tourist destinations in general are holding up well, unlike large cities, according to company data.
On the coast, for example, destinations such as Deauville, the Arcachon basin, the Basque coastIle de Ré, the Côte d’Azur and the Var coast (Sanary-sur-Mer, Le Lavandou) show stable prices compared to 2023.
In Marseille, the mania is confirmed with prices rising by 16% for exceptional properties.
“The quiet and sunny life of the city of Marseille attracts a high-end clientele with strong purchasing power who can telecommute,” explains Romain Linossier, deputy director of Barnes Marseille.
In large cities that are not located on the sea, however, the prices of luxury goods drop by up to -5% in Lille, and -10% in Lyon and Nantes for example. HA Paris finally, the drop in prices is limited to 4%.
Fears for the outcome of the legislative elections
If society was quite optimistic, after the dissolution of the National Assembly the concerns returned. “We have a German buyer who was very enthusiastic. After the European Championships, he was very worried, he had doubts”, explains the director of the Basque Coast Philippe Tomine Desmazures.
The company also records two cases of buyers who have complained “a withdrawal clause”in case the left comes to power, but its request is not accepted by the sellers. Barnes fears a flight of capital after July 7, in particular because of possible tax measures on assets. But his director remains optimistic and also sees luxury real estate as a safe haven in times of crisis.