Luxury real estate: the cities where prices are finally falling and those where they are still climbing higher

While they had increased by another 3% in 2023, the prices of luxury goods have started to decline very slightly this year, observes the real estate group Coldwell Banker within its network of agencies in France. But price variations differ considerably depending on the city.

Luxury goods are not immune to the real estate crisis. At least not those whose price fluctuates between 1 and 5 million euros “only”. The number of sales on this market was divided by almost two within the French network ofreal estate agencies of the American group Coldwell Banker since the start of the surge in credit rate, two years ago. An even greater fall than that of the entire real estate market, which nevertheless plunged by 37%. As a result, the prices of luxury goods, which had increased by another 3% in 2023, began to increase in 2024. drop, very slight, of 0.8%between January and November, over a year, observes Coldwell Banker.

In this market, buyers are “driven more by desire than by necessity”recalls Laurent Demeure, president of Coldwell Banker Europa Realty, in a press release published on December 10. They don’t buy a property for 2 million euros because they need an extra room for their youngest child, but because they want an even more beautiful and even better located apartment. Not being in an emergency situation to find the right shoe for them, buyers have plenty of time to“demand price cutseven if it means giving up on the purchase if the price seems exaggerated to them”continues the manager.

Increasing trading margins

Without forgetting that buyers of properties worth 1 million euros are often forced to resort to credit, to the extent that they are not necessarily billionaires buying cash. They too, like more modest buyers but in smaller proportions, have therefore paid the price of the quadrupling of credit rates between the beginning of 2022 and the beginning of 2024. “This impacted markets which had experienced a particularly strong increase in their prices in recent years, such as Arcachon»where they have fallen by almost 8% since the start of the year (see table below).

It must be said that the fall in the number of easily “fundable” buyers has forced sellers to give up on prices. “THE negotiation margins have increased significantly, particularly in markets which had benefited the most from lifestyle changes linked to Covid, such as teleworking and the popularity of semi-secondary residences.notes Coldwell Banker. If trading margins on luxury goods increased from 5.5% to 6.9% in France in two years, for example, they have more than doubled in Boulogne-Billancourt (Hauts-de-Seine), to reach around 9% of the sale price, or 8% in Arcachon.

Family towns still in vogue

In contrast, four family towns have seen luxury property prices increase since the start of the year. These are Saint-Germain-en-Laye (+10.1%), in Yvelines, Megève (+3.5%), Biarritz (+2%) and Lyon (+1.6%). Increases of 3 to 5 points higher than those of the entire real estate market in these four cities. “The coach of a very large sports team wanted to find a property with greenery close to Paris. He was immediately seduced by a beautiful house costing 3.5 million euros in Yvelines. This father also appreciated the near the British School of Croissy and the international high school of Saint-Germain-en-Laye”testifies Gilles Baudrier, who manages the Coldwell Banker agency in Vésinet.

Her colleague Flora Zermaen, from the Chamonix agency, cites the recent sale of a 160 square meter chalet, at a price of 2.2 million euros, near the center of this mountain resort and with view of the Mont Blanc range and the Aiguilles de Chamonix: “It was a Parisian business leader who bought it, on the first visit, without negotiating. She knows Chamonix well and knows that building permits will be increasingly rare in this station where space is limited ».

Search for a pied-à-terre in Paris

On the Mediterranean basin also, prices continued to increase this year, by 1.2%. But this average hides significant differences between cities where prices are finally falling after several years of increases, such as Antibes (-8.3%), Marseille (-4.1%) or Grimaud (-2.9%), and those where they continue to increase, such as in Cannes (+1.1%) and Nice (+0.1%).

What about the French capital? In Paris, buyers of luxury goods were fewer in number this year, but sales also fell, to 5,600 properties, compared to 12,600 in 2023. This scarcity supported prices, which fell by only 1, 7% on the left bank of the Seine and 0.1% on the right bank. “As in London, demand for small, pied-à-terre type properties is sustained through hybrid work, with executives having their main residence outside Paris and coming to work a few days a week in the capital”explains Coldwell Banker.

The Olympic Games effect on Parisian luxury real estate

And thanks to the spotlight of the Paris 2024 Olympic Games, “foreign investors are back in the capital. We recently sold a 3 to 4 room apartment, near the Champs-Élysées, listed for sale at 1.55 million euros. He attracted a Lebanese businessman, who wanted a pied-à-terre close to luxury stores.illustrates Vanda Demeure, vice-president of Coldwell Banker Europa Realty.

She also mentions the sale of a two-room apartment of 30 m², in the 7th arrondissement, presented at 575,000 euros. The American culinary blogger who bought it intends to make regular gastronomic trips to Paris and travel along the banks of the Seine, by bike, “like a real Parisian». No doubt the “Emily in Paris” effect this time.