With the interest rate cut stance from the Central Bank of Europe, wealthy buyers are returning to the once-frozen real estate market in Paris, France.
On the 30th (local time), according to the Financial Times (FT) and the local real estate industry, the family of Chair Bernard Arnault, who leads the luxury empire LVMH, bought three ultra-prime Paris properties over the past year for a total of 199.5 million euros (about 337 billion won).
A closer look at the purchases shows the Arnault family's new properties are in the best locations in Paris. The family bought a townhouse in the 7th arrondissement in Dec. last year for 58 million euros (about 98 billion won). Then in Mar. 2025, they added a 17th-century mansion in the same 7th arrondissement for 97.5 million euros (about 165 billion won). In May, they secured an apartment in the affluent 16th arrondissement for 44 million euros (about 75 billion won). The apartment is said to feature lavish amenities, including an indoor garden and a marble fireplace.
Not only Chair Arnault but also Pharrell Williams, the creative director for Louis Vuitton menswear and a renowned musician, joined the buying spree in Paris real estate. Pharrell Williams this year bought a property in the 1st arrondissement of Paris for 62.5 million euros (about 106 billion won). The residence sits in a historic building overlooking the Louvre Museum and the Tuileries Garden.
Unlike the general market for dwellings, the ultra-prime housing market has a limited buyer base and extremely scarce supply. When heavyweights like the Arnault family or Pharrell Williams make large purchases at a specific price point, it cements property values in that area. Real estate experts said, "News of celebrity buyers sets a 'price benchmark' for the entire market," and added, "It also sends a powerful psychological signal to other asset holders that 'now is a good time to buy.'"
Global billionaires insist on Paris real estate for asset efficiency and symbolism. Prime Paris properties are known as "trophy assets." They are less volatile than stocks or bonds, and the cultural and symbolic value of the city of Paris serves as a safety net for the asset. Because scarcity is so high, values do not easily fall even in economic crises. Compared with New York in the United States or London in the United Kingdom, Paris's ultra-prime market has relatively tighter supply, giving prices stronger downward rigidity.
Christie's International Real Estate said in this year's global luxury market report, "Affluent buyers are not simply buying a house, but purchasing the unique historical and cultural experience that the city of Paris offers," and analyzed, "Large Paris residences with guaranteed security and privacy are irreplaceable assets."
In particular, during a rate-cut cycle like now, funding expense falls, intensifying competition to lock in prime listings among these trophy assets. According to statistics from the Central Bank of France, the average interest rate on new mortgage loans fell from 4.17% in Jan. last year to around 3.2% in Mar. this year. Big buyers who had stayed on the sidelines under high-rate burdens began returning to the real estate market as they were able to raise funds at lower cost.
Falling rates immediately led to an increase in transactions. Data from the Paris Notaries show that, as of the third quarter this year, existing dwellings transactions in Île-de-France (the capital region including Paris) surged 13% from a year earlier. It is the steepest quarterly rise in two years. As deals picked up, prices also started to climb again. The National Institute of Statistics and Economic Studies (INSEE) said Paris apartment prices ended a run of 10 straight quarters of declines and rebounded 1.9% year over year in the third quarter this year. The Paris Notaries projected, "Market liquidity will improve further through the first half of 2026, with transaction volumes returning to normal levels."
Of course, the outlook is not all rosy. Growing domestic political uncertainty in France and debate over the wealth tax are factors holding back the Paris real estate market just as it warms. France currently imposes a real estate wealth tax (IFI) on property owners with net worth of 1.3 million euros (about 1.95 billion won) or more. Richard Tzipine, head of Barnes real estate, told the FT, "Amid political instability and fears of tax hikes, not a few Paris residents are trying to sell real estate assets and move overseas."