Investing in luxury real estate - an optimistic and constant market?

As underlined by the real estate key figures in this Le Figaro article - including Alexander Kraft, CEO of Sotheby's International Realty France-Monaco, luxury real estate is unaffected by the crisis, and investment in bricks and mortar is still a safe and persistent bet. Nevertheless, some novelties are to be taken into consideration, changing the situation somewhat: although prices are holding up, and despite the return of foreign buyers and investors, real estate consultants note that negotiations are getting tougher and that some sales may fail due to funding issues.

Record sales in 2022

Mr. Kraft announces at the start of 2023 that 2022 has been an “unexpected historic record year”, with 1.61 billion euros in sales achieved in the French network.

High prices for high end properties

The crush is priceless; and even if the buyer is more attentive to the Price / Default ratio, we note that the presence of a garden with a swimming pool or a terrace comes at a high price. Most likely the consequence of the Covid 19 era, as well as changes in personal and professional habits (remote working).

Return of an international clientele

While more and more potential buyers are unable to obtain their credit on the lamba real estate market, luxury real estate is enjoying the return of its foreign clientele. Taking into account the end of the pandemic and an exchange rate very favorable to fortunes denominated in dollars or Swiss francs, France remains an essential playground for real estate investors. “We are seeing the largest budget increase in the provinces for several years, with record sales in all regions, thanks to the return of foreign buyers to the French market this year”, confirms Alexander Kraft, “In addition, savvy investors are looking to put their liquid funds in stone, and this is especially the case for Americans who are very concerned about inflation.”

Longer and more difficult transactions, funding refusals

Negotiations are rife, including on flawless houses or apartments. ... The buyer analyzes and scans the entire property, including its Energy efficiency audit (DPE). As for difficulties in obtaining credit, this is a rare phenomenon in the luxury real estate sector. Nevertheless, there are; in question, in particular, the rate of wear. "We see a two-speed market emerging on the horizon," said Alexander Kraft, head of Sotheby's International Realty France-Monaco. "On the one hand, the “normal” prestige market dominated by the French, which will slow down due to files blocked by banks and lower client liquidity; and on the other the high-end prestige market which is more resistant to current challenges because it is supported by informed investors with significant liquidity and a desire to benefit from alternative investments.”

You have a real estate project on the French Riviera: contact Côte d'Azur Sotheby's International Realty at info@cotedazur-sothebysrealty.com

With 5 real estate agencies in Saint-Tropez, Cannes, Nice, Beaulieu sur Mer and Saint-Jean Cap Ferrat, our real estate experts will accompany you, offering a tailor-made service for a serene transaction.