The Ukraine Effect: What Consequences for the Real Estate Market?

The onset of the war in Ukraine in 2022 created a tidal wave across the world, affecting various markets, including real estate. Numerous sanctions against Russian citizens have caused a radical change, particularly in the luxury real estate market in France. Their properties are now frozen, awaiting decisions by the French government. These drastic measures have introduced a new dynamic in the real estate world.

Luxury Real Estate Remains Unaffected by the Crisis

Luxury real estate, especially the mountain real estate market, is a sector that does not experience crises. Despite economic fluctuations and geopolitical upheavals, interest in prestigious properties in sought-after destinations like Courchevel remains unchanged.

Demand for the mountain second home market is driven by motivations quite different from those influencing the classic residential real estate market. Buyers primarily seek an exclusive lifestyle in an idyllic environment with breathtaking landscapes, proximity to nature, and privileged access to numerous family activities. Ski resorts like Courchevel provide the ideal setting to meet these expectations. Investors are willing to spend significant amounts to acquire prestigious second homes that offer a unique mountain experience and create family memories.

For many years, mountain luxury real estate has benefited from a diverse international clientele. Buyers come from various countries and cultures, maintaining consistent demand in the market. While some Russian investors are temporarily forced to withdraw due to sanctions related to the war in Ukraine, new buyer nationalities are emerging, keeping the market stable. French, British, Belgian, and Middle Eastern investors show increasing interest in prestigious properties in the 3 Valleys region.

Real estate, in general, is considered a safe haven, providing long-term stability and security. Even during crises, high-end properties retain their value and can even see significant price increases over the years.

Savvy investors view luxury real estate as a way to diversify their portfolio and protect their assets. Ski destinations like Courchevel and other prestigious resorts in the French Alps have a limited number of luxury properties, creating rarity and high demand. Buyers are willing to invest in unique, high-end properties, knowing they are sought after and maintain their appeal over the years, with the potential for a return on investment through seasonal rentals.

Who Are the Buyers in Luxury Real Estate?

The real estate market is constantly evolving, with buyer profiles not set in stone. Over the years, we have seen changes in investor profiles in the luxury real estate market, maintaining its appeal in France.

The war in Ukraine has profoundly affected and influenced the clientele of the real estate market in Courchevel, especially Russian investors. Measures taken by France against Russians, particularly the freezing of real estate owned by Russian nationals, have forced many Russian investors to withdraw from the French real estate market. This situation has opened the door to new investors of different nationalities.

French and British buyers, for example, have shown a strong renewed interest in luxury real estate in Courchevel. We have also seen the arrival of new players, such as Belgians and Middle Eastern investors, who have significantly contributed to the diversification of clientele in the luxury real estate sector in Courchevel.

The real estate market in Courchevel has experienced significant changes with its legendary Russian clientele. Nevertheless, luxury real estate remains unaffected by crises due to the sustained interest it generates.