Fancy apartment rentals for Paris Olympics see poor demand and price cuts - Hindustan Times
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Fancy apartment rentals for Paris Olympics see poor demand and price cuts

Bloomberg |
Apr 20, 2024 07:21 PM IST

Locals in Paris who’d hoped to turn a big profit by renting out their posh apartments during Olympics are now slashing prices by 30%-60%.

(Bloomberg) -- Parisians hoping to rent out their splashy apartments at a premium during this summer’s Olympics are starting to temper their lofty ambitions, as they come to terms with a tepid demand and an oversaturated market.

Parisians hoping to rent out their splashy apartments at a premium during this summer’s Olympics are starting to temper their lofty ambitions, as they come to terms with a tepid demand and an oversaturated market. (Representational photo)(Pixabay)
Parisians hoping to rent out their splashy apartments at a premium during this summer’s Olympics are starting to temper their lofty ambitions, as they come to terms with a tepid demand and an oversaturated market. (Representational photo)(Pixabay)

Real estate agencies, which can help Parisians list their permanent homes as temporary rentals for vacationers, say they’re cutting prices for luxury rentals in chic neighborhoods and tempering expectations of owners who’d hoped to ride the wave of visitors coming to the capital. 

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“The supply is there, but we don’t have as much demand as we thought,” says Omar Meniri, head of Paris rentals at Engel and Völkers. “Unfortunately, right now it’s not up to par with what I was hoping for.”

It’s not just agents who are disappointed by the overblown hype. Many overeager owners listed their apartments at three or four times the usual nightly rate, only to find that few people were willing to shell out.

Also Read: Heatwave risk hovers over Paris Olympics

Nathalie Garcin, co-president of real estate firm Emile Garcin, says that she has slashed prices to half of what owners had initially sought while also becoming more selective about what she lists.

“We’re only taking very beautiful apartments that are in perfect shape,” Garcin says, with new bedding and tasteful decorations. “We’re reasoning with owners” about how to set prices, she adds.

What's the rent for a 1100 sq ft apartment?

High-end, 100-square-meter (1,100-square-foot) primary residences are currently asking around €10,000 per week, according to data shared by multiple real estate firms. Some had been going for €20,000 or €30,000 as recently as a few months ago. 

As of mid-April, two-thirds of the total available nights in four- and five-bedroom apartments in Paris during the Games were still up for grabs, according to short-term rental data provider AirDNA. (The company’s data reflect the more conventional vacation rental platforms such as Airbnb and Vrbo.) The average rate paid for those properties comes in at 1108€ per night—a 15% markup over the average rates that have been booked for the two-week window before the games. For listings that remain unbooked, the average available rates during the Olympics period reflects a 35% markup compared to the two weeks before. 

Also Read: Why rich Indians are buying marquee properties in London

At Barnes, only 10% to 20% of the firm’s Olympics portfolio has been rented, with most of the bookings finalized in January, says Benjamin Brjost, vacation rental director for the Paris region.

A big slowdown in rentals?

“We’re seeing a big slowdown,” Brjost says, with hope that the bookings rush he anticipated in April may still transpire in May. 

Some experts warned that current listings might continue to languish, as most well-heeled visitors traveling to Paris booked lodgings a year ago, when they got their Olympics tickets. There’s also a risk that people might cancel bookings if they see prices coming down and find something cheaper.

Also Read: Delhi-NCR's real estate market: Here's why rich Indians are lapping up luxury properties

Christophe Ouvrieu, head of the Breteuil branch of real estate firm Junot, put his own home—a 150-square-meter apartment near the Place de l’Europe in the 8th arrondissement—on Airbnb last July, hoping to turn a profit during the Olympics. Shortly after, it was rented for the duration of the Games. 

“At the time, people were saying that you could rent at triple your usual rate, but my wife and I decided to double,” Ouvrieu says. “We saw people listing at absolutely crazy prices because they thought, ‘Why not me?’”

Low rentals not viable for high-end homeowners

But for many high-end homeowners, the cost of readying their apartment for vacationers simply won’t be worth it if they have to lower prices, leaving experts to guess that they will abandon the prospect entirely before slashing their rental fees. 

“These are clients who are well off enough that they can afford to not rent out at all,” said Baptiste Albot, head of Left Bank rentals at Emile Garcin. “No one wants to rent at €5,000 a week. They’re leaving on vacation anyway and don’t care whether it’s rented or empty.”

©2024 Bloomberg L.P.

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