Luxury real estate in the world

Paris is ranked first among the most attractive cities for luxury real estate, according to the 2023 Barnes Index City, an annual report compiled by Barnes, an international real estate network specializing in luxury real estate and luxury lifestyle services. The report takes into account the international context marked by an unforeseen and prolonged war, as well as various economic and financial tensions.

The low euro and the return of inflation to levels thought to be a thing of the past seem to be linked to the renewed interest in the French capital. Paris, currently gearing up for the 2024 Olympics, appears to garner more unanimous attention from international investors, drawn to its heritage, culture, and economic strength. Four other European metropolitan areas (London, Geneva, Madrid, and Milan) are also among the Top 10, indicating a potential resurgence of historical cities in the eyes of affluent clients.

Following Paris, the most sought-after cities among Ultra High-Net-Worth Individuals (UHNWI), individuals with a net worth of at least $30 million, include two perennially desirable American destinations, Miami and New York. Miami takes the lead with a change in scenery, showcasing continuous success with its mix of white sandy beaches and vibrant economic activities. New York follows closely, displaying an extraordinary ability to recover after questionable pandemic management. Austin, the capital of Texas, has emerged in just a few years as a preferred destination for digital entrepreneurs. Dubai, ranking fifth in the world, has become a kind of El Dorado for luxury, tech, and health investors. Over two decades, Dubai has transformed from a destination for investment to a place to live.

The ranking also features two Italian cities: Milan at the tenth position and Rome at the eleventh.

Rome has made a significant leap in the ranking of the world's most desired cities by ultra-rich individuals, confirming the trend of growing demand in recent years. The real estate situation in Rome has experienced a surge in luxury property demand, especially from foreign clients. The luxury rental market is thriving, with increased demand and rental rates. The supply is scarce due to the resurgence of short-term rentals (vacation homes) with the restart of tourism, which had experienced a slowdown during the Covid-19 pandemic. Rome is currently experiencing a golden period for tourism, with double-digit growth trends in short-term rentals compared to the pre-Covid period.

In the ranking, two Italian cities stand out: Milan at the tenth position and Rome at the eleventh.

Rome has made a significant leap in the ranking of the world's most desired cities by ultra-rich individuals, confirming the trend of growing demand in recent years. The real estate situation in Rome has experienced a surge in luxury property demand, especially from foreign clients. The luxury rental market is thriving, with increased demand and rental rates. The supply is scarce due to the resurgence of short-term rentals (vacation homes) with the restart of tourism, which had experienced a slowdown during the Covid-19 pandemic. Rome is currently experiencing a golden period for tourism, with double-digit growth trends in short-term rentals compared to the pre-Covid period.

"The leasing market is doing well, and demand and rents are increasing. Supply is scarce because, with the resumption of tourism, short-term rentals (vacation homes) have resumed, which had experienced a period of stagnation during Covid. Rome is experiencing a golden period for tourism: for short-term rentals, there is indeed a double-digit growth trend compared to the pre-Covid period," comments Giovanni Gargano, CEO Managing Partner of Barnes Rome, the new flagship office of over 250 square meters in Piazza della Minerva.

Milan, on the other hand, has witnessed substantial growth in luxury real estate transactions, outpacing even Milan, which had already experienced its peak in 2015. The upcoming events in Rome, such as the Ryder Cup of Golf, the Jubilee 2025, and the potential Expo 2030, are attracting new foreign investors.

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The Barnes City Index 2023 reflects the profound upheavals of the last three years. Who's Rising: The top tier consists of five cities that have managed to reassure investors in this period of uncertainty. In addition to Paris at the top of the list, three major U.S. cities have secured the 2nd, 3rd, and 4th positions due to their economic vitality – Miami (Florida), New York (New York), and Austin (Texas). Next, in the 5th position, is Dubai, which joins the exclusive club of safe global investments thanks to its appeal to entrepreneurs and expat families in particular. Among these traditional "safe bets," it is noteworthy that London (United Kingdom) is in the 7th position behind Geneva (Switzerland), Madrid (Spain), Milan, and Rome (Italy), confirming a bipolar certainty within the index between North America and Europe. Tokyo (Japan) is also remarkable, flying solo in the sixth position. At the threshold of the Top 10 is a newcomer, Istanbul (Turkey), which attracts more investors each year due to its strategic location at the crossroads of Europe and Asia. Another city at a cultural crossroads, Doha (Qatar), has joined the City Index, swept by the success of the World Cup held there in November/December 2022. Tel Aviv (Israel) is back in the game at the 35th position after a three-year absence, partly due to the pandemic.

And Who's Falling: China's closure to foreigners has led to several Chinese cities falling or being out of the index. Similarly, the war in Ukraine has alienated Moscow and St. Petersburg (Russia) for an unspecified period, although this has not prevented Russian investors from remaining active in Asia and the Middle East. San Francisco, California, USA, ranked 29th in 2022, is another place that has slipped from the rankings due to the city's administrators' questionable management and appears to be declining as a beacon for technology and digital gems. Among the cities that have fallen the most in the ranking are Hong Kong SAR (China), down from 20th to 34th place, and Vienna (Austria), which seems to have failed to live up to investors' expectations, dropping from 16th to 27th place.

Top Ten + 1

Paris, France (was fifth in the 2022 report)

Miami, USA (1)

New York, USA (7)

Austin, USA (2)

Dubai, United Arab Emirates (47)

Tokyo, Japan (3)

London, UK (6)

Geneva, Switzerland (4)

Madrid, Spain (9)

Milan, Italy (45)

Rome, Italy (22)

Focus on Paris For decades, the luxury real estate market has been limited to specific arrondissements in the West and the historic center. Interestingly, this has changed recently, with all 20 arrondissements now included, signaling a revolution and a new approach to Parisian life. Supported by a brand image seemingly immune to crises, the Parisian market is reaching new heights, with ever-increasing records for truly exceptional properties. The symbolic threshold of €3,717 per square meter has been surpassed by Barnes on several occasions since 2020, and sales approaching and exceeding €4,647 per square meter are expected by the end of 2023.

Particularly for superior quality renovation programmes, mainly aimed at an international clientele. Luxury sales, i.e. those above EUR 3 million, consequently increased significantly in 2022. In the departments of Yvelines and Hauts-de-Seine to the west of Paris, the obsession with open-air space that began with the 2020/2021 lockdown has now become a prolonged trend. Neuilly-sur-Seine and Boulogne-Billancourt, for their part, are considered by buyers as two additional arrondissements and are seeing their prices align with the upper averages in Paris.

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