Unique Homes Blog

Scantly affected by the economic downturn, homes in Paris, the French Riviera and Monaco hold their value.

By Roger Grody

France and neighboring Monaco support a luxury real estate market that consistently draws the world’s attention, with chic apartments on Paris’ Left Bank, grand châteaux in the Loire Valley and glamorous penthouses along the Côte d’Azur. Luxury markets throughout Europe were affected by the global recession, but the timeless appeal of the French lifestyle has proven a stabilizing influence and a major contributor to a recovery whose momentum is accelerating.

Laurent Demeure, president and CEO of Coldwell Banker France and Monaco, reports that even a crisis of epic proportions barely slowed the Paris luxury real estate market, which he defines as starting at 1 million euros [approximately $1.35 million]. After a scant 5 percent retreat during the depths of the housing crisis, Demeure indicates that prices rebounded a remarkable 20 percent in 2010. He explains that France suffers a chronic shortage of housing in general; despite the government’s goal of adding 500,000 housing units annually, only 300,000 are being built. Lack of inventory is even more pronounced in the luxury market, particularly in the virtually built-out City of Light, where there is simply not enough productto accommodate demand.

“Luxury properties in Paris and the Côte d’Azur continue to rise due to the increase in high-net-worth individuals around the world,” says Demeure, who cites an extraordinary statistic on the number of foreign buyers in France. “Twenty-five percent of all Côte d’Azur luxury properties are purchased by international buyers, and more than half of all transactions in Paris involve foreigners.” While Americans and Europeans traditionally have comprised the majority of international buyers, Russians, Brazilians and Indians are now heavily involved in these markets, with Chinese buyers just beginning to make an appearance. Americans and Brits are drawn to the charming villages of Provence, while German and Dutch buyers gravitate to the sun-kissed Mediterranean coastline.

After losing money in stocks and more speculative real estate markets, Demeure insists that international buyers are drawn to the perceived safety of investing in high-end Paris property. The so called Triangle d’Or (Golden Triangle) in the close-in 8th arrondissement (one of 20 districts in Paris) tends to attract younger, flashier buyers, while the neighboring 7th arrondissement, just across the River Seine, is favored by old money. In the equally coveted 16th  arrondissement, a completely renovated, nearly 3,000-square-foot apartment with unobstructed views of the Eiffel Tower is currently listed at the equivalent of almost $6 million, while a renovated 2,260-square-foot apartment on prestigious Rue du Faubourg Saint-Honoré in the 8th is offered at $3.5 million.

Near Bois de Boulogne, a sprawling park that separates densely populated Paris from its western suburbs, the communities of Neuilly-sur-Seine and Boulogne-Billancourt provide a market for detached single-family homes. Surprisingly, the prices per square meter of such homes often exceed those of central city apartments. But the most spectacular prices are reserved for private mansions in town, grandiose properties referred to as hôtels particuliers. A perfect example is the spectacular Palais Montmorency, currently on the market in Paris’ 16th arrondissement. Draped in masterfully restored architectural splendor, this 36,590-square-foot museum-quality property is listed at 105 million euros, or the equivalent of more than $140 million!

The luxury market on the legendary French Riviera, or Côte d’Azur — it includes the glamorous resort destinations of Nice, Cannes and Saint-Tropez — is not quite as robust as Paris, but prices are solid. Nice, where a Russian Orthodox cathedral is a major landmark, naturally attracts newly minted Russian petro-billionaires, while Cannes draws Americans, Middle Easterners and any star-struck buyers seduced by the city’s renowned film festival. Saint-Tropez is a place for the rich and famous to party, but the ultra-exclusive community of Cap Ferrat is a quieter enclave for those with less of a need to show off. “Properties in Cap Ferrat are very rare,” reports Demeure, who advises, “If you have the opportunity to buy one, don’t even look at the price per square meter.”

Led by Demeure, Coldwell Banker recently expanded into the exquisite Principality of Monaco, which becomes the company’s 50th country. There, some of the most magnificent residences in the world are squeezed into a jewel-like nation less than a single square mile in size. Prices are even steeper than in Paris, and Demeure warns, “Sometimes you can pay as much as 5 million euros [nearly $6.8 million] for a single room.” That room, however, comes with an eye-popping Mediterranean view, security, luxurious amenities and favorable tax policies.

A lavish 5,595-square-foot apartment with a garden terrace and private pool is listed for $39.97 million, while a penthouse near Monte Carlo’s Casino Square that overlooks the harbor is offered at $29.8 million. Despite these stratospheric prices, Demeure suggests this is a good time to invest in Monaco. “Prices won’t come down and currently there is a balance between supply and demand. If you wait, it will become unbalanced like Paris,” he says.

Contact Previews, Coldwell Banker France & Monaco, +33.1.83.53.53.53, previews@coldwellbanker.fr

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