In July 2020, Engel & Völkers recorded 60 percent more transactions in the luxury real estate segment over the same period in the previous year, for homes sold for between 2 and 5 million euros. “We are already seeing significant catch-up effects after the challenging first half of the year. Buyer activity is high in both national and international real estate markets,” says Sven Odia, CEO of Engel & Völkers AG.
Especially, the level of demand for luxury real estate has risen sharply. Sven Odia explains this as follows: “The coronavirus and the health risk it poses have triggered a desire among many people to live in properties with ample space, set in extensive grounds. Properties on the edge of towns and cities, and in suburban neighbourhoods, are therefore becoming increasingly attractive.” The most important buyer criteria at present include a garden affording sufficient privacy, and a large overall living interior, meaning that space is available for grown-up children or older relatives if required. Many buyers are also expressing an interest in the option to customise floor plans with the addition of a playroom, hobby room, and one or more studies, in light of the fact that they may continue working from home.
During the pandemic, many people are reluctant to forego travel but are looking for alternatives to a hotel. Frequently, they decide to opt for an exclusive second home, in places such as Majorca, the Côte d’Azur or Tuscany. Here, too, large plots of land and ample space for a home study are in high demand, as the coronavirus outbreak now means that offices can be located anywhere, blurring the boundaries between first and second homes.
The property market on Majorca is one example of where demand for luxury real estate is extremely high. “Our transaction volume on Majorca in July 2020 is 75 percent higher than the same month last year – at 49 million euros. Many of our clients cannot wait to finally view the property they have had their sights on, and are then very quick to make a decision to sign the contract. This demonstrates once again that international buyers regard Majorca as a safe haven for properties in the premium segment,” says Florian Hofer, Managing Director of
Engel & Völkers on the Balearic Islands.
“In some of our core markets, such as the DACH region, we are already operating back at pre-coronavirus levels, while other markets, like the USA and Canada, are even up from the previous year’s results. Overall, we expect a positive development in the second half of the year,” Sven Odia reveals. The company was able to continue its business activities with relative success throughout the spring, too, as Engel & Völkers had invested heavily in the development of digital tools and IT products over several years previously. Meaning that, even at the height of the restrictions in place, it was possible to conduct virtual property tours with clients, among other things. “Intensive client relations were maintained at all times, and we were in a position to offer a wide range of services. This is now paying dividends, with many of the deals initiated in the springtime now coming to fruition,” Sven Odia adds.