This is a real paradox in the real estate market. The number of transactions in France is falling sharply due to difficulties in accessing real estate loans for buyers… And yet the prices of luxury housing on the main advertising sites continue to rise.
That’s the startling finding of a brand new barometer of prime property prices, built by property data specialist PriceHubble and luxury stone agency network Coldwell Banker. A barometer that covers the luxury real estate market in France, Belgium and Switzerland, right Capital will present you with a preview.
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The barometer reports changes in average prices per square meter of sold housing between 1 and 5 million euros. These average prices were measured by studying all advertisements published on real estate portals in 2023.”Rather than measuring prices based on past sales statistics, we rely on ad price trends. This allows you to immediately see what price developments the sellers are projecting.», describes Laurent Demeure, president of the Coldwell Banker network.
The network studied in detail the development of prices in 24 cities popular with wealthy buyers. In fact, PriceHubble and Coldwell Banker have identified at least 115 real estate listings for sale in these “places” to date, with listing prices between €1 million and €5 million. Most are located in the Île-de-France or the Cote d’Azur. Among the destination cities, however, we also find very popular villages in Switzerland, Belgium and on the Atlantic coast.
Ad prices are rising… but with room for negotiation
And surprisingly, despite the slump among buyers who face a loss of real estate purchasing power as a result of rising lending rates, prices are rising in some cities or regions. For example, in France, the average price per square meter of these luxury homes increased by 3% in one year.
And especially on the Cote d’Azur, where we observe a spectacular increase: +9 in Nice, +7% in Aix-en-Provence, +10% in Cannes and even +14% in Antibes! “The luxury market in France is roughly a third of transactions around Paris, a third on the Cote d’Azur and a third in other regions. If prices on the Côte d’Azur go up, domestic prices will mechanically be pulled up», deciphers Laurent Demeure.
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The explanation comes partly from the fact that among the buyers, many come from countries with high purchasing power, such as the United States, Switzerland, the Netherlands, Norway or Sweden. Price growth is much more moderate compared to our Swiss (+0.2% average) or Belgian (+1%) neighbors.
But beware: it must be reiterated that we are only talking about the ad price indicator here. However, recalls Laurent Demeure, “we often see considerable room for negotiation before the sale is signed. These correspond to an average of 7% of the starting priceAverage prices are therefore likely to fall in the coming months.