This is the surprise of the BARNES study. Despite the strikes and the yellow vests crisis, Paris has become the preferred city for international clients to invest in real estate, ahead of New York, Tokyo, Los Angeles and Hong Kong.
Paris, its permanent events, its traffic difficulties… Yes. But Paris is also the world capital of tourism and a privileged hub for international investors. Paris has now also become the preferred real estate market for the world’s richest people.
This is the main lesson of the Global Property Handbook 2020, the annual study of BARNES on prestigious international real estate. The luxury real estate network analyzes a very specific segment of individuals and families each year. These are the HNWI * or UHNWI ** for “High-Net-Worth Individuals” and “Ultra High-Net-Worth Individuals”. To be eligible for either of these two categories, you must have assets of between one and thirty million dollars (or more).
At the scale of the planet’s population, these individuals are in the minority. In view of what they have, however, their contribution to the growth of the world economy is preponderant, especially as their number is increasing every year, even if the progression slowed significantly in 2019. They are today 265,000 worldwide. By 2023, they should exceed the 350,000 mark. Their cumulative fortune will then amount to more than 40,000 billion US dollars.
Paris 1is in front of New York and Tokyo
For several years now, the capital of France has featured prominently in this list. Fifth in the 2019 survey, it only took a year to take the lead and overtake New York, Tokyo, Los Angeles and Hong Kong.
This performance does not surprise Thibault de Saint Vincent, President of BARNES: “We have been anticipating him for a few years. Paris combines historical and tourist interest and enjoys good economic health. In addition, it is a world exception by “celebrating” its fourth consecutive year of increase in transactions and prices, now exceeding € 10,000 on average per square meter ”.
Regarding other cities, the top five also seems justified. New York remains in 2nd position, “a sign of its stability and its unabashed attractiveness”. Tokyo, a new entrant directly promoted to third place, is benefiting from an exceptional real estate upturn, a situation undoubtedly reinforced by the prospect of the 2020 Summer Olympics. A bit like New York, Los Angeles demonstrates its solidity and retains a 4th place which it already occupied last year. Conversely, Hong Kong, which was first in 2019, falls to fifth place due to the political uncertainties that have agitated it since last summer.
In a context of Brexit and historically lowest interest rates in France, Paris was in 2019 the international city of reference in Europe for luxury real estate, ahead of London, Madrid and Lisbon.
The Haussmann effect
Paris thus confirms its potential, thanks to its high-quality real estate offer in almost all of its districts. This makes our capital a special case on the map of major international metropolises. All the districts, even the most affordable, offer freestone buildings typical of the city’s history, since they are the result of work carried out by Baron Haussmann in the 19th century. Historically, luxury real estate focused on the 6th, 7th, 8th and 16th centuries, but its center of gravity has rebalanced. The Marais has seen its popularity increase significantly, as well as the neighborhoods with a “village” connotation, popular with a young and trendy clientele.
“In addition, Paris reached a plateau in 2019. Indeed, the average price per square meter has officially exceeded the symbolic bar of 10,000 euros for all of its transactions, all districts combined. In the very high end, more and more sales are approaching or even exceeding another symbolic bar, that of 30,000 euros per square meter, ”adds Thibault de Saint Vincent.
London hurt by Brexit in 6e position
Already out of the top 5 last year, the city of London has been impacted by the uncertainties related to Brexit for 3 years. In appearance at least, because the British capital has more than once in history demonstrated its capacity for resistance. Despite everything, it remains the most cosmopolitan city in Europe. A financial and real estate stronghold, it is still very much appreciated by entrepreneurs around the world.
The fact remains that when it comes to real estate, London had to face several economic adversities. After a dizzying and continuous rise in prices between 2009 and 2014, the wait-and-see policy succeeded from 2015 to 2019, leading to a slight drop in prices, but even more, a considerable reduction in the number of transactions. In addition, the market had to integrate the increase in the stamp duty (stamp duty or transfer duties) to 12% at the end of 2014 for transactions exceeding 1.5 million pounds sterling.
Moscow 48e : a “red star” is born
With 12 million intramural inhabitants, the Russian capital is the most populous on the European continent. A leading artistic, cultural and tourist center, Moscow is famous for the splendor of its historic center, a UNESCO World Heritage Site. If the Kremlin district and Red Square attract hundreds of thousands of visitors each year, Moscow is a particularly active city, which produces a quarter of the country’s economic wealth. It made a remarkable entry in the charts, in 48th place, with, for the first time in 5 years, a resumption of transactions and a rise in real estate prices of 5 to 10% in Moscow in 2019.
Lyon 49e, the 2e French city in this ranking
Finally, back in France, Lyon also had the right to the benevolence of wealthy investors from around the world. The capital of the Gauls offers prestigious properties in its heart, with beautiful old apartments very coveted whose prices do not drop. Two hours from Paris by TGV, less than 2 hours from the ski resorts of the Alps and less than 3 hours from the beaches of the Mediterranean, Lyon indeed enjoys a privileged location which has earned it its place in the top 50, just behind Moscow, in 49th place. The volume of transactions remained very strong in 2019 with a slight increase in prices ranging for high-end real estate between € 6,500 per m² and € 10,000 per m².
