Prestige real estate and insurance in step with the ecological transition

France’s prestige real estate market is showing signs of resilience despite an uncertain economic climate. While prices continue to rise, attention is turning to an ambitious ecological transition, necessitated by recent crises. Players such as Allianz are offering specific insurance for these luxury properties, responding to the new climate and energy challenges.


France’s prestige real estate market is showing signs of resilience despite an uncertain economic climate. After the post-Covid euphoria, the market slowed down due to rising interest rates. However, prices in this segment continued to climb, with a 1.7% year-on-year increase to June 2024, while those in the traditional old housing market fell by 2.5%.


In Paris, prices rose by 2.2%, with the median price exceeding 2 million euros. Regions such as the Alps and their ski resorts show rising prices, with a median house price of 2.5 million euros, and even 7.2 million euros in Courchevel. Other regions, such as Provence, Côte d’Azur and Normandy, are also seeing significant price increases.


The ultraluxury segment remains dynamic, particularly in Paris, where Chinese buyers are now outnumbering Americans. On the other hand, the shortage of supply is beginning to slow sales in areas such as the Luberon and the Alpilles.


Against this backdrop of climatic and energy transformations, companies are playing a crucial role in ensuring greater real estate security. Allianz, like other major players in the sector, offers specific insurance policies for prestigious properties. These policies cover not only traditional risks such as fire and burglary, but also the new challenges posed by climate change, such as flooding and storms.


Towards greener prestige real estate


In the face of recent health, geopolitical, energy and inflationary crises, prestige real estate is moving towards an ambitious ecological transition. The building sector, which accounts for 44% of energy consumption in France, is at the heart of this transformation.


Crises have served as catalysts for this transition. The energy crisis of 2022 prompted 55% of households to reduce the temperature of their homes. Renovation projects are now often redirected towards energy-saving work. The Diagnostic de Performance Énergétique (DPE) and other energy audits have become central to buying and renting decisions.


Technical and organizational innovations are essential to meet the growing demand for green buildings. For example, the replacement of boilers with reversible heat pumps has increased, and self-consumption of energy has exploded since the end of the COVID-19 pandemic.


Buyers’ aspirations are also turning towards greater autonomy and eco-friendly solutions, such as “do-it-yourself” for certain insulation work and the installation of sustainable energy systems.


Insurance and prestige real estate


With changing climatic and energy conditions, insurers are also having to adapt. Prestige properties, often located in high-risk areas (coastal, mountainous), require specific insurance policies covering increased risks, such as flooding, landslides and storms. That’s why you need to choose the right home insurance for your needs.


Insurance premiums for these properties are rising, reflecting the potential costs of necessary repairs and energy renovations. Insurers also need to offer cover for integrated green technologies, such as solar panels and alternative heating systems.


Increasingly stringent regulations on energy efficiency and climate resilience are forcing homeowners to invest in ongoing improvements. Insurers must therefore adjust their offers to include specific clauses linked to green renovations and the maintenance of sustainable equipment.


To ensure the sustainability of the market, a global strategy involving all players (builders, investors, insurers) is crucial. This strategy must aim to reinforce the ecological transition while maintaining the attractiveness and value of prestige properties.



Featured photo : © Pixabay

Picture of Hugues Reydellet
Hugues Reydellet
Hugues Reydellet is a young and passionate journalist whose favorite subjects are economy, culture, gastronomy, but also cars, and sports. With a sharp pen and an insatiable curiosity, Hugues is constantly on the lookout for new hot information to report.

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