Luxury real estate in France in 2023: Trend analysis and outlook with Alexander Kraft

In a recent interview, Alexander Kraft, CEO of Sotheby's International Realty France-Monaco, shared key insights into the luxury real estate market in France. During his talk, videos featuring prestigious properties from the Sotheby's International Realty France-Monaco network, such as Domaine de Beaumont or Villa Virginia, offered for sale at Côte d'Azur Sotheby's International Realty, illustrated his remarks.

Analysis of the prestige real estate market in 2023

The slowdown in the French real estate market, with a drop of around 20% in sales of older homes according to the FNAIM for the year 2023, is a subject that no longer comes as a surprise as we approach the end of 2023.

However, luxury real estate seems to be evolving differently, displaying distinct dynamics, according to Alexander Kraft.

Luxury real estate: two speeds and stability in 2023

When it comes to luxury real estate, the market presents a duality. After years of record growth with price rises of up to 50% to 100% since 2022 and its health crisis, a stagnation is observed, marking a natural market cycle.

Alexander Kraft insists, however, that although the number of transactions has fallen by around 20%, sales are taking place at higher amounts, thus maintaining a certain stability.

Price trends in luxury real estate in 2023

The average price of luxury real estate transactions in France has reached all-time highs, averaging 2 million euros within the Sotheby's International Realty France-Monaco network, across the whole of France, surpassing previous years when the average transaction price fluctuated between 1.2 and 1.3 million euros.

Trends in the mid-market in 2023

The mid-market real estate segment is showing signs of trouble, with buyers heavily dependent on credit. Rising bank rates and banks' reluctance to grant loans have lengthened buying and selling processes, sometimes preventing transactions from being finalized, or making them take much longer.

Factors impacting real estate sales in 2023

Flawless properties continue to sell quickly, but those with imperfections are seeing their prices drop significantly, leading to aggressive offers and often more tense negotiations.

Which clientele buys in luxury in France?

French customers remain the most active at all price levels. Inflation is encouraging the French to invest in stone, thus favoring real estate for the long term. Foreign investors, particularly American and European, are making a comeback, while others, such as the Chinese and Russians, are more absent.

Alexander Kraft has observed a very discreet influx of buyers from the Middle East, a clientele that is difficult to attract as they already live in highly attractive real estate sectors such as Dubai.

Regional and international performance of French luxury real estate

The French luxury real estate market is one of the best-performing in the world. For example, it is holding up much better than the US, where high interest rates and soaring prices in major cities have impacted the sector. In France, mountainous regions such as Chamonix and Courchevel attract an international clientele, particularly English and American, and are recording very good sales for 2023. Mr. Kraft mentions an exceptional but confidential sale of between 10 and 20 million euros in Megève.

Other notable sales include private mansions in Paris, notably on the prestigious Avenue Foch, and properties on the Côte d'Azur. These include superb waterfront villas in Nice and Roquebrune Cap Martin, as well as the magnificent Villa Les Bolovens, a veritable piece of American film history, where Hitchcock shot scenes from "La Main au Collet" with Cary Grant and Grace Kelly. All these properties illustrate the diversity of the luxury real estate market in France. So, despite a drop in the number of transactions, the volume of sales in luxury real estate in 2023 is close to that of the previous year, with higher sales prices, for a total of 1.4 billion euros in assets sold.

Alexander Kraft is reassuringly optimistic: while the market is following its natural downward cycle after the upturn of 2021 and 2022, buyers are still out there, and with substantial budgets, the Sotheby's International Realty France-Monaco network is there to present them with increasingly exceptional and unique properties in their respective markets, throughout our territory.

Find out more and listen to an interview with Alexander Kraft:

To discuss your real estate project on the Côte d'Azur and around the world, contact your nearest Côte d'Azur Sotheby's International Realty agency:

Cannes - 74 boulevard de la Croisette 06400 Cannes

Saint-Tropez - 9 avenue Paul Roussel 83990 Saint-Tropez

Nice - 5 rue Longchamp 06000 Nice

Beaulieu-sur-Mer - 37 boulevard Marinoni 06310 Beaulieu-sur-Mer

Saint-Jean-Cap-Ferrat - 3 avenue Denis Semeria 06230 Saint-Jean-Cap-Ferrat