Why invest in Real Estate?
Numerous investment tools are available today for those looking to create or consolidate their wealth.
Regardless of market fluctuations, real estate has demonstrated its stability compared to other financial markets, proving to be an efficient choice for investors seeking long-term opportunities.
A tool for stability and growt
Stable returns, capital appreciation, and protection against inflation are key benefits of real estate investment. But that's not all. Security is also paramount. Historical data shows that the real estate market has low correlation with financial markets, thereby reducing risks associated with market volatility.
During the 2008 crisis, the S&P 500 index - representing the 500 largest companies in the United States - dropped by 38.5%, while the U.S. residential real estate market decreased by only 10%. In managing significant wealth, combining real estate and financial investments is not only an essential diversification strategy but also a crucial factor in maximizing returns and minimizing volatility.
The Real Estate market on the French Riviera
In terms of the stability of high-end real estate investments, the French Riviera ranks among the most sought-after and attractive destinations for international investors, with buyers primarily from the Middle East (35%, particularly from Dubai and Doha), the United Kingdom (30%), and Russia (20%).
From 2013 to 2023, property values in this region have progressively increased, with an annual average of 5% and a total increase of 55% over the decade. Luxury property rents have seen similar growth, reflecting constant and dynamic demand. Specifically, in Saint-Jean-Cap-Ferrat, villa prices have increased by 7.1% per year over this period. In Roquebrune-Cap-Martin, property values have risen by 19% in 4 years, from 13,000 euros per sqm in 2019 to 15,500 euros per sqm in 2023.
Meanwhile, the average rental price for properties worth more than one million euros has seen a 12.5% increase, from around 4,000 euros per month in 2019 to 4,500 euros per month in 2023.
Another example is Saint-Tropez, where villa prices have risen by 17.6% (from 17,000 euros per sqm in 2019 to 20,000 euros per sqm in 2023).
The consistency of this appreciation highlights the robustness of the luxury real estate market and the ability of this asset to generate stable returns.
Protection against inflation
Between 2019 and 2023, the average annual inflation rate in France was 1.5%, peaked at 7.3% in February 2023, followed by a reduction to 2.2% in May 2024 thanks to the ECB's monetary policy.
During this period, property prices on the French Riviera increased by an average of 5-7% per year, surpassing inflation and maintaining investors' purchasing power.
Risk diversification
The state of financial markets has a limited impact on real estate.
Over the past ten years, the S&P 500 has seen a growth of 190%, characterized by notable volatility. During the pandemic crisis of March 2020, the index dropped by 34%, followed by a rapid recovery of 70% by the end of the same year. Conversely, the luxury real estate market on the French Riviera showed great resilience with a slight 2% drop and a quick recovery, recording a growth of 5-7% by the end of 2021. These figures demonstrate the real estate market's ability to better absorb economic shocks than stock markets, ensuring greater stability for investors.
Therefore, to maximize the risk-return ratio and make an investment portfolio efficient, it is important to engage assets in both the real estate market and financial markets, following solid financial planning that clearly identifies investment objectives.
Key takeaways
Investing in real estate and financial markets is essential for investors with significant wealth.
The French Riviera market, with its historical stability and continuous growth, stands out as an ideal choice for diversifying and balancing an asset portfolio.
At Valerio Festa Real Estate Investments, we promote an investment culture based on risk management through diversification.
When executed according to the fundamental principles that define it, real estate investment represents one of the most effective forms of diversification, providing a solid foundation for building an efficient and resilient portfolio.
Sources :
https://www.fnaim.fr/4296-marche-immobilier-juillet-2022.htm
https://www.notaires.fr
https://www.notaires.fr/fr/actualites/note-de-conjoncture-immobiliere-avrilmai-2024
https://www.insee.fr
Numerous investment tools are available today for those looking to create or consolidate their wealth.
Regardless of market fluctuations, real estate has demonstrated its stability compared to other financial markets, proving to be an efficient choice for investors seeking long-term opportunities.
A tool for stability and growt
Stable returns, capital appreciation, and protection against inflation are key benefits of real estate investment. But that's not all. Security is also paramount. Historical data shows that the real estate market has low correlation with financial markets, thereby reducing risks associated with market volatility.
During the 2008 crisis, the S&P 500 index - representing the 500 largest companies in the United States - dropped by 38.5%, while the U.S. residential real estate market decreased by only 10%. In managing significant wealth, combining real estate and financial investments is not only an essential diversification strategy but also a crucial factor in maximizing returns and minimizing volatility.
The Real Estate market on the French Riviera
In terms of the stability of high-end real estate investments, the French Riviera ranks among the most sought-after and attractive destinations for international investors, with buyers primarily from the Middle East (35%, particularly from Dubai and Doha), the United Kingdom (30%), and Russia (20%).
From 2013 to 2023, property values in this region have progressively increased, with an annual average of 5% and a total increase of 55% over the decade. Luxury property rents have seen similar growth, reflecting constant and dynamic demand. Specifically, in Saint-Jean-Cap-Ferrat, villa prices have increased by 7.1% per year over this period. In Roquebrune-Cap-Martin, property values have risen by 19% in 4 years, from 13,000 euros per sqm in 2019 to 15,500 euros per sqm in 2023.
Meanwhile, the average rental price for properties worth more than one million euros has seen a 12.5% increase, from around 4,000 euros per month in 2019 to 4,500 euros per month in 2023.
Another example is Saint-Tropez, where villa prices have risen by 17.6% (from 17,000 euros per sqm in 2019 to 20,000 euros per sqm in 2023).
The consistency of this appreciation highlights the robustness of the luxury real estate market and the ability of this asset to generate stable returns.
Protection against inflation
Between 2019 and 2023, the average annual inflation rate in France was 1.5%, peaked at 7.3% in February 2023, followed by a reduction to 2.2% in May 2024 thanks to the ECB's monetary policy.
During this period, property prices on the French Riviera increased by an average of 5-7% per year, surpassing inflation and maintaining investors' purchasing power.
Risk diversification
The state of financial markets has a limited impact on real estate.
Over the past ten years, the S&P 500 has seen a growth of 190%, characterized by notable volatility. During the pandemic crisis of March 2020, the index dropped by 34%, followed by a rapid recovery of 70% by the end of the same year. Conversely, the luxury real estate market on the French Riviera showed great resilience with a slight 2% drop and a quick recovery, recording a growth of 5-7% by the end of 2021. These figures demonstrate the real estate market's ability to better absorb economic shocks than stock markets, ensuring greater stability for investors.
Therefore, to maximize the risk-return ratio and make an investment portfolio efficient, it is important to engage assets in both the real estate market and financial markets, following solid financial planning that clearly identifies investment objectives.
Key takeaways
Investing in real estate and financial markets is essential for investors with significant wealth.
The French Riviera market, with its historical stability and continuous growth, stands out as an ideal choice for diversifying and balancing an asset portfolio.
At Valerio Festa Real Estate Investments, we promote an investment culture based on risk management through diversification.
When executed according to the fundamental principles that define it, real estate investment represents one of the most effective forms of diversification, providing a solid foundation for building an efficient and resilient portfolio.
Sources :
https://www.fnaim.fr/4296-marche-immobilier-juillet-2022.htm
https://www.notaires.fr
https://www.notaires.fr/fr/actualites/note-de-conjoncture-immobiliere-avrilmai-2024
https://www.insee.fr