Market Trend – September press release, Sotheby’s International Realty France-Monaco.

Alexander Kraft, our Chairman and Managing Director in France and Monaco, is speaking at the start of the 2023 financial year: "This year has been marked by a difficult socio-economic context, with inflation, rising bank lending rates and the tightening of the conditions for obtaining them, the fall of the euro and the current geopolitical situation. Nevertheless, the luxury property market is performing steadily, and the picture since the start of this complicated year is surprisingly positive.

As Alexander Kraft explains, 2020, 2021 and 2022 were record years, and the current context led us to believe that this enthusiasm for real estate would lose momentum and vigour in 2023. However, the results for the first half of the year show the opposite to be true, with sales of more than €1 billion to date, better than in 2022! Despite the crisis situation, Alexander Kraft says: "2023 is shaping up to be another very strong year despite the difficult circumstances."

Impressive sales volume in 8 months

With more than 560 sales under its belt since the beginning of January, the luxury real estate network in France and Monaco can only note the real dynamism of its flagship market: top-quality properties offered to buyers ready to invest in exceptional real estate, on condition that a price is posted in line with the current market.

A two-speed market trend

While the figures are still exceptional this year for luxury, a two-speed trend is clearly emerging: On the one hand, "lambda" buyers, most often French, who have been held back in their acquisitions by their difficulties in obtaining bank loans. On the other, ultra-luxury buyers, wealthy French or international investors, with significant liquidity and a strong desire to invest their money in a value.

More selective buyers and a trend towards negotiation

The agencies in the Sotheby's International Realty France - Monaco real estate network have nonetheless noted that sales are taking longer, with negotiations taking longer and buyers being even more demanding when it comes to the quality of properties.

As a result, while prices for exceptional properties are levelling off after several years of increases, mid-market or lower-end houses, estates and flats are seeing their selling prices revised downwards.

International buyers on French soil

While Americans remain motivated by a dollar that is still very strong against the euro and consequently by greater purchasing power, we are also seeing the return of Middle Easterners keen to turn their dollar funds into a long-term investment. Prestige real estate continues to exert its attractive power around the world.

A look at the network's fine transactions

"The prestige property market is doing very well no doubt thanks to four factors: interesting transactions to complete with prices often revised downwards, numerous offers available on the market thanks to resales of properties bought with credit during the pandemic, interest rates that remain high but seem to be stagnating, and a market that represents a safe haven," reports Alexander Kraft.

As a result, the 80 Sotheby's International Realty France Monaco branches are seeing a high level of activity across the country, with some exceptional sales for their market.

On the Côte d'Azur, for example, the sale in 15 days, at the price, of an exclusive mandate in Saint-Jeannet : Villa Bolovens, which hosted the filming of Alfred Hitchcock's The Hand in the Snare, starring Grace Kelly and Cary Grant.

Caution for the end of the year

With transactions taking longer, French buyers are still showing an interest in the luxury property market. Naturally, the network remains cautious, and is preparing for a general slowdown after three record years.

However, Alexander Kraft explains that this return to market normality will be partly moderated by the strategic investment of French fortunes in prestige properties at the right price, like a safe haven, at a time when France is witnessing the return of international buyers. Proof of this is the extraordinary number of millionaires and their property holdings in France. Mr Kraft concludes: "(...) in difficult times, prestige property remains a safe haven for savvy investors".

Read the interview with Mr Kraft on MySweetImmo