The pandemic has had an undeniable impact on real estate in Paris—13 percent fewer homes were sold in the city between August and October 2020, compared with the same period in 2019, according to a recent report by the Notaries of Greater Paris. But the decreasing transactions are counterbalanced by a lack of supply—and a steady demand—that has buoyed the market.

And, for luxury property, 2020 was a robust year, says Charles-Marie Jottras, CEO of Daniel Féau Conseil Immobilier and Belle Demeures de France. “Due to the exceptional context provoked by the pandemic, we have indeed observed a decline in our sales at prices ranging from €1m ($1.19m) to €3m ($3.58m),” he explains. “But the market for assets at prices in excess of €3m reacted quite differently.”

“In this segment, our agencies in Paris achieved a sale every three days, with an average price of €4.97m ($5.92m). These sales were concluded at an average price per square meter of €18,667 ($22,243) compared with €17,091 ($20,365) in 2019—representing a 9.2 percent increase.”

Luxury real estate is still in high demand in the French capital, such as this three-bedroom period apartment in the 16th district, on the market with Belles Demeures de France, which offers two wine cellars and views of the Eiffel Tower.

“It’s also worth noting that for sales achieved by our agencies at prices ranging from €1.5m ($1.79m) to €3m ($3.58m), the average price per square meter increased by 6.1 percent,” he adds.

A New Buyer Profile

Pre-2020, the luxury real estate market in Paris attracted a large proportion of international buyers from the United States, China and the Middle East. In light of the pandemic, says Jottras, this demographic has shifted.

“We’ve seen a virtual disappearance of Chinese and American buyers, who have not been able to come to France for many months,” he explains. “However, customers from the Middle East have been able to visit thanks to private travel, and European and French buyers—notably those returning from the United Kingdom in anticipation of Brexit—have replaced our usual international customers to a significant extent.”

This large duplex apartment, with a 20-foot (6 m) cathedral ceiling and a 160-square-foot (15 sq m) terrace—available through Daniel Féau Victor Hugo—is of great appeal to the new demographic of local buyers in the city.

“All in all, while our share of sales to international customers for properties in excess of €3m fell by 35 percent in 2020, the proportion of French buyers rose.” These local buyers now represent three in every four sales, he says—”an exceptional level in this market segment.”

A Need for Space

After stringent national lockdowns, the definition of desirable housing in Paris has now expanded to include areas outside the city, particularly in its eastern and western suburbs.

“As a direct consequence of lockdown, the demand for properties with an outdoor area, a terrace or garden, was very strong,” Jottras observes, pointing to a remarkable increase in sales at both Daniel Féau’s Neuilly and Saint-Cloud agencies—the latter of which saw a 54 percent uptick, with an average price per property of €1.52m ($1.81m).

With more than 10,760 square feet (1,000 sq m) of living space, on a 35,520-square-foot (3,300 sq m) plot within the 16th district, this expansive villa offers an elegant ease of living. It is currently listed with Belles Demeures de France.

“Our Aix-en-Provence agency and, to a lesser extent, our château department, also benefited from city-dwelling families changing their lifestyle and ‘heading for the countryside.’ They have chosen to live in the provinces where they have a high-speed railway service under 45 minutes away, a reliable wifi network and, if they have children, good schools nearby,” he continues. Although he cautions that “this dynamic remains relatively marginal in terms of overall numbers of sales.”

The Rest of 2021 and Beyond

So, what does Jottras believe these trends indicate for the future of luxury real estate in Paris?

“They demonstrate a persistent appetite for real estate assets that are considered a safe haven, especially in the current context where investments in, for example, bonds or life insurance seem less favorable,” he says.

On the market with Belles Demeures de France, this magnificent penthouse apartment in the 8th district offers a 388-square-foot (36 sq m) landscaped terrace, and benefits from the services provided by an adjacent five-star hotel.

“But above all, these trends reflect the Parisian market’s structural imbalance with supply—notably due to the absence of new builds—while national and international demand remains strong.

“We do not see how the shortage of supply could change in the short and medium term, and demand is in no way on the decrease. The quality of its buildings, its rich culture, and its beauty still make Paris one of the most sought-after capitals in the world.

“This imbalance seems likely to persist and demand will most probably continue to largely exceed supply in the Parisian luxury real estate market in 2021.”

This story originally appeared on Luxury Defined by Christie’s International Real Estate.