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.

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 neighbourhoods and tempering expectations of owners who’d hoped to ride the wave of visitors coming to the capital. 

“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 Volkers. “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.

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.

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High-end, 100-square-metre primary residences are currently asking around 10,000 euros (S$14,500) per week, according to data shared by multiple real estate firms. Some had been going for 20,000 or 30,000 euros as recently as a few months ago. 

As at 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 1,108 euros per night – a 15 per cent 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 per cent markup compared to the two weeks before. 

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

“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 travelling 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.

Christophe Ouvrieu, head of the Breteuil branch of real estate firm Junot, put his own home – a 150-square-metre 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?’”

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 euros a week. They’re leaving on vacation anyway and don’t care whether it’s rented or empty.” BLOOMBERG