Investing in real estate remains the preferred investment of the French, along with life insurance. Thanks to historically low mortgage rates, the profitability of purchasing property continues to increase, whether it is for a primary residence or a rental investment. Furthermore, the rise in real estate prices is not about to stop, so now is the ideal time to invest.
The rise in real estate prices affects both new and old properties. In city centers where the market is particularly tight, older properties are plentiful but often require renovation, particularly to improve their energy efficiency. Replacing a boiler that will need to be maintained, insulating walls, replacing windows, etc. And in city centers, profitability is even higher than in the suburbs or the countryside. For properties in classified areas, it is even possible to obtain tax reductions thanks to the Malraux law.
The current climate is therefore more than favorable for real estate investment. And this is even more true for luxury real estate.
Luxury is one of the few sectors that has remained resilient to economic crises. Although it has been affected, the impact has been minimal compared to other sectors, and this has been the case for decades. However, the sector is undergoing change and modernization in order to adapt to the new practices of customers, who now belong to a younger generation and were born into the digital age. But that's not all: these new buyers are also heavily influenced by environmental and sustainable development issues. Luxury brands must therefore adapt to these changes. Fur and leather are gradually being abandoned in favor of synthetic materials, fabrics manufactured under more ethical conditions, etc. The same is true in luxury real estate, where the search for a lower ecological impact is gradually becoming more widespread. It is now possible to supply your home with green electricity, and the presence of solar panels no longer has as much of an impact on the aesthetics of a property.
Luxury goods and products benefit from a scarcity effect in relation to demand. This is the reason behind the constant increase in real estate prices in this sector, where the decision to buy or not is often driven by love at first sight. Whether you want to buy on the French Riviera to live with a sea view, or turn to rental investment and rent in Saint-Tropez, anything is possible. On the other hand, wealthy buyers do not make price one of their main concerns. They are more interested in the uniqueness of the property, its geographical location, the services available, its modernity or historical significance, etc. However, heritage and modernity are not incompatible. In fact, modern and home automation systems are becoming increasingly popular. For example, with a simple internet box, it is possible to manage all home automation and video surveillance systems, which are essential for a prestigious property. This is the case for the Freebox Delta, designed by Philippe Starck. Find out more about Free's offers with the package comparison tool.
In 2018, there were fears that prices and demand in the luxury real estate market would fall following the abolition of the ISF wealth tax, which was replaced by the IFI property tax. However, the tax does not seem to have affected the sector.
