Luxury properties in Paris: stability despite global turmoil

In the face of years of turbulence – from the pandemic to political instability and preparations for the Olympic Games – the luxury real estate market in Paris has demonstrated impressive resilience.

According to data from the international consulting company Knight Frank, since the beginning of 2020, the price per square meter in the premium segment of the Parisian market has increased by 12%, reaching €22,730.

In the second half of 2023, experts report a slight slowdown in activity - the number of transactions drops to 12,220, which is less than reported even in the first half of pandemic 2020. However, certain categories of housing continue to enjoy increased demand.

“A shortage of supply and renewed interest from foreign investors are keeping demand strong for new builds, pied-à-terres and historic mansions,” said Kate Everett-Allen, European housing expert at Knight Frank. She said that amid global uncertainty, Paris remains a “safe haven” for wealthy buyers.

Main characteristics of the market

Limited supply continues to put pressure on prices. In Paris, fewer than 2,000 new luxury homes are built each year, creating a serious shortage – especially in the new construction segment. Prices for pied-à-terre apartments are also rising, mainly due to increased interest from Chinese investors.

Historic mansions (hôtel particuliers) remain the most exclusive segment. Last year, only six such transactions took place. This year has already seen two record sales in the prestigious 7th arrondissement: one property sold for €55 million and another for €100 million.

An interesting trend: nearly half of buyers (46%) are willing to pay a premium for a property with a view of iconic Parisian landmarks.

Who buys?

Domestic demand has been stagnant in recent years, largely due to French homeowners' commitment to favorable mortgage rates. However, the market is expected to pick up if interest rates on loans are reduced.

International interest in the Paris market remains high. According to a survey of 750 wealthy respondents from 28 countries, Paris tops the list of the most desirable cities for relocation. The main foreign buyers in 2024 are citizens of the United States, China, the UAE, Saudi Arabia and the United Kingdom.

Based on materials from prianproperty.com