Luxury real estate in Paris: a surge in prices due to Brexit

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This is the Brexit effect. French and European nationals who, until now, lived off the Channel (in London more specifically), are therefore more and more numerous to cross in the opposite direction.

In the opinion of several real estate specialists, there is no question of seeing in this an epiphenomenon, since according to the targeted neighborhoods, housing sales from this clientele can now reach 12%. Among their favorite areas, the 8ethe 16the, the 17the districts are in good position. This is also the case in Neuilly-sur-Seine, where the operations carried out by these very specific customers have fluctuated for the past six months between 8 and 12% in high-end real estate networks.

Parallel to this, the French and Europeans who choose to come or to return to settle in Paris also often opt for neighborhoods like the Marais, but also for districts like the 6e, 7e, 9e and 18e. In this case, between 5 and 10% of the transactions are concerned. Result: Since this summer, hundreds of sales have been made with buyers who have decided to leave London to transfer their business.

Stronger demand

The problem is that the arrival on the market of this new clientele, whose purchasing power is greater than that of Parisians, contributes to the significant increase in prices in these boroughs. These buyers with a particular profile accentuate, casually demand while the supply of real estate in the capital remain "structurally in short supply", recall the players in the sector.

For Thibault de Saint-Vincent, president of Barnes, "it is no longer possible to find a good property at less than 12 000 euros per square meter in the Martyrs-Montmartre area". Same in the Marais. In this area, "the market is just as dynamic with 22 sales made this month, including a quarter of buyers coming from London," he concedes. Beyond this, several levels have recently been crossed within the Barnes network. In the 18e arrondissement for example, the cap of 20,000 euros / m² was exceeded. In the Marais, have reached even 25,000 euros per sqm for exceptional properties.

A marginal trend?

The advantage for these newcomers is that they have, a priori, acquisition conditions extremely interesting in that they have often sold their apartment in London to finance their purchase. Among them, the essential would work in finance. This would be mainly households between 40 and 50 years old with children who usually look for flats near good schools.

Still, despite the soaring prices in Paris (9,353 euros / m² for an apartment, 10,026 euros / m² for a house, according to figures published by Best Agents) other players, like the Sotheby's International network Realty, on the contrary, consider that despite these significantly higher results, this trend would remain marginal. At least, for now …

These figures would, indeed, be taken with the utmost precaution insofar as they concern only the very high-end market. Except that real estate specialists know it. Rising prices in the luxury goods industry generally have an almost instantaneous impact on the overall market.