Real Estate/Sotheby’s International Realty France-Monaco report: 2022, an unexpected record year
Despite a complicated context (war in Ukraine, inflation, rising interest rates, falling euro, tense economic situation, Covid effect) and the holding of presidential elections in May, luxury real estate is doing well, more than good. Moreover, the prestigious real estate network, Sotheby’s International Realty France-Monaco, draws up an assessment of the year 2022 that is both exceptional and unexpected and announces encouraging prospects for the first quarter of 2023.
Sales volume of more than 1.61 billion euros: +11% compared to 2021
Alexander Kraft, Chairman and CEO of Sotheby’s International Realty France-Monaco welcomes : ” With a record sales volume of 1.61 billion euros, we once again exceeded the record results of 2021. Despite a noticeable slowdown towards the end of the year which brought us to a historical sales volume of nearly 400 million euros (€392 million) in the fourth quarter, we see a more than robust result for 2022 which once again beats all records. It exceeds 2021, which far exceeded 2020, itself a record for several years. These results are above what could be expected and demonstrate that the luxury real estate market remains a safe haven and an alternative investment in difficult times. Proof of the robustness of this market, we concluded several very good sales in December, including one at 30 million euros in Paris.. »
Nearly 1,000 prestige sales, a number of transactions comparable to that of 2021
Over the year 2022, the more than 70 agencies of the Sotheby’s International Realty France – Monaco network carried out nearly 1,00 prestige sales0 (970 sales), i.e. a number of transactions almost identical to that of 2021 (1,001 sales) . The average price of 1.67 million euros is up 15% compared to 2021 thanks to record transactions, great interest in exceptional properties in the provinces and in Paris, and the return of foreign buyers.
The French agencies of the network therefore achieved a total sales volume of more than 1.61 billion euros (1,602 million euros, an increase of 11% compared to 2021), again a record, and more than 60 sales between 5 and 50 million euros.
Alexander Kraft: explains “ This sales volume of approximately 1.61 billion euros shows that the luxury real estate market in France has still held up spectacularly so far. 2022 is proving to be even better than the two record years that signaled it but the market should now normalize “. If the market tends to balance out, the first quarter of 2023 remains promising thanks to the large number of transactions in progress which amounts to more than 200 million euros (under offer/compromise).
Higher transactions everywhere in France
Whether it is properties located in Paris, in large cities or rather in the countryside, main or secondary residences, luxury real estate has once again won the French over the whole territory in 2022.
The Sotheby’s International Realty France-Monaco network achieved record sales in all regions. In Paris with several sales between 10 and 50 million euros, in other popular markets such as the Côte d’Azur or the mountains with sales between 5 and 15 million. ” This year we achieved many more record sales as well as sales between 5 and 10 million euros, including in the provinces. We are seeing the largest budget increase in several years, with record sales in all regions, thanks in particular to the return of foreign buyers to the French market this yearexplains Alexander Kraft.
The more than 70 agencies in the network have seen strong activity in all French markets, with exceptional sales for these markets: “ In the South (Provence, Côte d’Azur, Languedoc), in the mountains (Megève, Méribel, Courchevel, Chamonix), in seaside resorts (Biarritz, Pyla-sur-Mer, La Rochelle-Ile de Ré, La Baule, Vannes, Le Touquet), metropolitan areas (Paris, Marseille, Lille, Lyon, Bordeaux) or inland (Brittany, Normandy, South-West), we have observed significant activitydetails Alexander Kraft. The Parisian market did very well and our 10 Parisian agencies (in the 3rd, 6th, 7th, 8th, 9th, 11th, 16th Victor Hugo, 16th Auteuil, 17th arrondissements, Neuilly-sur-Seine) achieved very good sales in 2022, including in western Paris such as in Hauts-de-Seine (Neuilly-sur-Seine, Boulogne-Billancourt, Levallois-Perret, Saint-Cloud, etc.) and in Yvelines (Versailles, Saint-Germain-en- Laye…). »
Some examples of goods sold in 2022
- Paris Left Bank : Nearly 50 million euros for an exceptional property
- Paris 16th : Around 30 million euros for a mansion in the OECD district
- Paris 8th : 7.35 million euros for a property located on Place Beauvau
- Paris 16th : 6.6 million euros for a property located in the Rue de la Pompe/Mairie district of the 16th arrondissement
- Paris 19th : 5.52 million euros for a property
- Neuilly-sur-Seine : 4.15 million euros for a property in the Saint-James district
- Cap-Ferret: Between 8.5 and 9 million euros, a front line villa on the Cap Ferret peninsula
- Pyla-sur-Mer: Between 4.5 and 5 million euros, a city on the front line in Pyla-sur-Mer
- Burgundy: Between 3 and 3.5 million euros, a private mansion in Bordeaux
- Basque coast: For more than 4 million euros, a contemporary villa in the Chiberta district, in Anglet.
- Brittany : For 6.5 million euros, a property at the end of the 19th century of more than 600 m² with sea view and direct access to the sea, on a plot of 8,000 m², in Dinard
- Island of Re : For more than 5 million euros, a master property located in the historic center of Saint-Martin-de-Ré
- La Rochelle: For more than 4 million euros, an exceptional mansion in the heart of the city.
A quieter end of the year (December) than expected
” This very robust luxury real estate market, with results that once again exceed those of the two previous years, seems to indicate that real estate remains a safe haven, especially in difficult times.explains Alexander Kraft. The French have changed their way of life since the Covid, by teleworking more in greener places and with more space, but also by taking advantage of social life again in large cities since deconfinement. Wealthy French buyers are well aware of the fact that it is particularly interesting to invest strategically in beautiful stone in the face of high inflation. However, towards the end of the year, we saw a plateau in activity which seems to indicate a normalization of the market for 2023 “.
A price cap on the horizon
” The market is normalizing. Between September and the end of December, we noted a slowdown in activity in the fourth quarter which posted very robust results, 392 million euros in sales volume, but less strong than the third quarter which had broken all records. (520 million). The luxury real estate market remains healthy but buyers are becoming more greedy, demanding properties ready to live in with all the comforts, and smoking more time to decide, especially if prices are not completely in phase with this new market realitycontinues Alexander Kraft. For now, we are seeing price capping and more trading. There will be no price increase. We can even expect a slight drop, either especially for overvalued properties or which have certain defects (work, decoration, etc.). »
A two-speed market on the horizon
” If the French are less omnipresent compared to the years 2020 and 2021, they still represent a significant percentage of our buyers and they have not lost their appetite for exceptional stone. “, adds Alexander Kraft. At the same time, since the spring of 2022 we have been witnessing a return of foreign buyers who benefit from the possibility of traveling and a strong dollar against the euro. We expect to see a continued rise in this phenomenon. We can see a two-speed market taking shape on the horizon: the normal prestige market dominated by the French, which will slow down because of the files blocked by the banks and less significant client liquidity, and the high-end prestige market which is more resilient to current challenges as it is backed by savvy investors with significant liquidity and a willingness to benefit from alternative investments. »
A market still supported by the French but a return of international customers
” The most represented nationalities are the Germans, the Swiss, the Scandinavians and, since this summer, the Americans. They have higher budgets than French buyers, often between 3 and more than 20 million euros. We have also concluded several registrations of transactions this year with foreign buyers. However, English buyers remain rare, no doubt a consequence of both the political and economic problems in their country and the lack of purchasing power given that the pound sterling is very weak against the euro. Since Brexit, the English have practically disappeared from the French market and that has not changed recently given the English political and economic events of recent months. “says Alexandre Kraft.
Source: Sotheby’s International Realty France-Monaco