Unlocking Opportunity: Why Now is the Time to Invest in France's Resilient Prestige Property Market

As the summer holidays wind down, the French property market is poised for a resurgence, especially in the prestige sector. From experience and daily conversations with agents across our region, it’s clear that the market is on the cusp of a shift. While data may take some time to catch up - likely surfacing in Notaire’s reports in about six months - the early indicators suggest that vendors are becoming more realistic with their pricing, and the buyer hesitancy we've seen will soon transform into acceptable offers.

If you’ve been considering buying property in France, now could be an opportune time. Prime real estate remains one of the best hedges against inflation, and the prestige market, in particular, is showing resilience amid broader economic challenges.

Recent reports on the French property market have painted a somewhat bleak picture, but the reality is more nuanced. While the overall market has contracted - from 1,172,000 transactions in 2021 to 922,000 in 2023 - the prestige market has performed notably better. For example, in 2023, there were 9,000 transactions over €1.2 million and 870 transactions over €3.2 million, representing a 2.5% increase compared to the previous year.

Moreover, prices at the top end of the market have held up more robustly than in the wider market. While the average market saw a price decline of 2.5%, the prestige segment actually experienced a 1.7% increase. This disparity can be attributed to the lesser impact of rising interest rates on luxury buyers, who often do not rely on mortgages to finance their purchases.

As noted by Thomas Lefebvre, Vice-President of Data at Belles Demeures (Groupe SeLoger), “These last two years clearly show that the traditional market and the luxury market play by different rules. While buyers in the traditional market struggle with rapidly rising interest rates, potentially forcing them to cancel their acquisitions, luxury buyers seem undeterred in their pursuit of real estate.”

“Ces deux dernières années confirment bel et bien que le marché traditionnel et le marché du luxe ne jouent pas avec les mêmes règles. Lorsque les acheteurs de l’un souffrent d’une hausse rapide et importante des taux d’intérêt les obligeant potentiellement à annuler leur acquisition, les acquéreurs du luxe de l’autre côté semblent assouvir leurs envies d’immobilier”, analyse Thomas Lefebvre, Vice-Président Data chez Belles Demeures (Groupe SeLoger)

Geographically, the prestige market is heavily concentrated in a few key areas. The regions along the Atlantic coast account for about 10% of the top 1% of the market. In comparison, Paris and its western suburbs dominate nearly half of these transactions, with the Côte d’Azur making up 14%.

If you're planning to buy in 2024, there are several factors to keep in mind. First, be specific about what you want - type of property, size, location, and budget. This clarity will make your search more efficient. Keep a close eye on interest rates if you need a mortgage, and set up a foreign currency account with a reputable broker to manage your finances smoothly. Lastly, leverage the expertise of local professionals to navigate the market effectively.

In conclusion, while the broader French property market may be experiencing challenges, the prestige sector remains robust. For those looking to invest in prime real estate, 2024 offers promising opportunities.