Thanks to a comparatively strong dollar and growing lifestyle interest, North Americans are a strong buyer base in southern European cities and the finest coastal and country locations.
Lisbon, Madrid, Paris, and Milan are all experiencing continued interest from UHNWs relocating for various reasons, including taxation, milder weather, and quality of life.
The residential market in Paris has demonstrated resilience despite economic fluctuations. Over the past decade, prime property prices have generally outperformed London and New York. However, this year, we predict that New York may perform better.
The French Riviera is very micro-driven, with specific locations and domains experiencing the greatest demand. These require careful understanding and detailed sales knowledge. The finest positions of Cap Ferrat and Cap d’Antibes are followed by Cap d’Ail and Cap Martin, which make up the super-prime category. This can then be broken down into specific hotspots and domains, together with the size of the house, land, area, orientation, and provenance.
St Tropez, often confused with the French Riviera, is technically in the province of the Var and has its own separate market. Demand for St Tropez’s finest homes can match or sometimes exceed that of the Côte d’Azur. The recent sale of Gunther Sach’s former waterfront home, in the domain of Capella, to an American hedge fund billionaire for a rumoured €90m is a good example.
The Balearic Islands, including Mallorca and Ibiza, have seen a surge in demand at the luxury end of the market. The islands’ natural beauty, favourable climate, beautiful ocean, and lifestyle make them attractive to affluent buyers, particularly from the UK and Germany.
Italy’s luxury real estate market remains robust, with Milan being the strongest city and regions like Lake Como and Tuscany particularly sought after. Lake Como, for instance, has long been a desirable location for wealthy homeowners due to its stunning scenery and proximity to Milan, Italy’s main hub of finance and design.
However, recent policy changes, such as doubling the flat tax for foreigners from €100,000 to €200,000 per annum, may influence future investment decisions. This is too early to determine as supply remains short, so values will only increase for the best of the best.
Portugal’s luxury property market has experienced significant growth, particularly in Lisbon and the Atlantic coastline around Comporta and Melides, often referred to as ‘the Hamptons of Europe. The country’s favourable tax regime climate and high quality of life continue to attract international buyers, including a notable influx of American investors.
Across these regions, the super-prime market remains characterised by limited supply and high demand, leading to relatively solid market conditions and good capital growth. The influx of international buyers, especially from the United States, has been a significant factor in sustaining a strong market in southern Europe.
In summary, Europe’s super-prime residential real estate markets are experiencing a period of growth and resilience, driven by international and lifestyle attractions.