Evolution of the luxe real estate market in France
Despite the increasing inflation rate (4,5% in 2023), the consequences of the pandemic crisis, the war in Ukraine and the higher credit rates, the luxe real estate market remains dynamic in contrast to the standard market.In this article, we brought toghether internal and external data from FNAIM, INSEE, Mordor Intelligence and PriceHubble as well as Statista in order to provide the summary of the most important real estate statistics to remember.
Evolution of the luxe real estate market between 2022 and 2023
While the prices of the traditional french real estate market are dropping, the luxe market still resists.This was concluded by an international study done on 54 real estate networks and focusing on properties valued between 1 and 5 million euros. dans 12 villes françaises.
Price evolution of luxurious properties
Southern France attracts the wealthiest investors. The following cities saw their price change between October 2022 and 2023.:
| Ville | Evolution |
|---|---|
|
Cannes |
+ 10% |
|
Nice |
+ 9% |
|
Aix-en-Provence |
+ 7% |
|
Lyon |
+ 2% |
|
Marseille |
+ 2% |
|
Paris |
+ 0% |
|
Biarritz |
– 2% |
|
Bordeaux |
– 3% |
|
Nantes |
– 4% |
The evolution of the luxe real estate market is different from the traditionnal one because there are less proposals, buyers negotiate less and sellers have no pressure. Some of our clients even say " I don't need money thus selling" and they are right because investments should not be done in a hury but with long-term profit in mind.
A market supported by foreign investments
Mordor Intelligence, FNAIM and Statista all forecast a a 4,5% CAGR increase for the luxe real estate market between 2021 and 2028.France can rely on its fame and prestigious areas like Paris and the French Riviera thanks to its architecture, culture and landscapes in order to attract foreign investors.
One should know the French Riviera presents one of the most expensive luxe real estate markets in the world, one of the only where prices remained stable despite the pandemicIn Paris, foreign investments represent an important part of the capital.
| Arrondissement | % de propriétaires étrangers |
|---|---|
|
District 8 |
30 % |
|
District 7 |
25 % |
|
East Paris |
20 % |
Among those customers are numerous americans benefiting from a comfortable exchange rate as one dollar is now almost worth as much as one euro. Moreover, interest rates in the USA average 5,5% versus 3,3% in France, making it more interesting to invest in our country.
The luxe real estate market on the coasts
Back to southern France, more precisely the French Riviera featuring the most expensive apartment in France where the price exceeds those of the Atlantic coast :
| Côte | Prix au mètre carré |
|---|---|
|
Côte d’Azur |
10 924€ / m2 (+2,7% in comparison with 2022) |
|
Atlantic Coast |
9 257 € / m2 (+ 0,9% in comparison to 2022) |
This increase is linked to the simplest principle of the market : when offers exceeds asks, prices go up. Indeed, the stock of luxe properties with view on the sea or ocean is outnumbered by the amount of buyers (Swiss, Scandinavian, American and French).
The incredible price increase in the countryside
Instead of buying a sea view, some investors turn back to the mountains where the luxe real estate market witnesses a price increase : chalets went up 11,5% last year ( 8 124 €/m2 on average).
The French Alps and their ski resorts have been an ideal winter holiday destination for decades and above all offer huge surfaces at affordable prices : we recently put a chalet on the market featuring 900 m2 of living surface for only 2 280 000€ ! With its 11 bedrooms and spa, it is almost a private hotel to welcome family or for seasonal rent. Here is its presentation video..
Others head to the countryside : the Provence also witnesses a 8,5% increase in a year for luxe houses with an average prix of 7 523 €/m2.
The ultra luxe real estate market
Only 1% of the french population is part of the ultra luxe real estate market (able to invest at least 5 million euros) in comparison the 5% on the "normal" luxe real estate market. Those 5% encountered a little more negations during 2023 : 20% of the sales were negotiated with a 10% discount on the initial sale price which lead to a 17% drop of luxe real estate agencies's turnover.
Difference between luxe and ultra luxe
Ultra luxe ignores all economic market principles because the motivation of buying comes from passion rather than from financial interests. Properties can be valued at unrealistic prices because of their history, architecture, materials or unique location. At Amanda Properties, we think that properties valued higher than 5 million euros can be considered ultra luxe. tout en répondant à l’un des facteurs précédents.
Transactions made in this market are so confidentially done that it is hard to collect data and statistics. Furthermore, there a so few of them that each sale can lead to a huge variation which makes it impossible to rely on an average prix. Indeed, some properties can cost ten millions while other hundreds. (an average price per square meter can't be settled).
Ultra luxe examples
Have you heard of the Nevada Villa in Cannes ? It was owned by the royal english family and queen Victoria herself spent some holidays in this example of ultra luxe : due to its history, this property is priceless. It is impossible to buy it right now but the owners let our agency rent it for short-term tenancy at tens thousands of euros a week. Visit the Nevada villa through this video..
Other example : this magical villa on the height of the California district in Cannes. Its panoramic view on the entire bay, the Lérins islands and Esterel mountains explains its price : 10 500 000 €. It feature the most beatiful view on Cannes I have ever seen in my life.
To sum it up, even though the luxe real estate market witnesses a drop in the number of transactions since 2021, the value of properties keeps rising, above all on the French Riviera, Alpes and Provence. Being honest, the increase rate is lower than it was before 2020 : the geopolitical event impacted the entire economy. Fortunately, luxe real estate resisted more than the standard markets.
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