Inflation is a dreaded word in the books of politicians and economists alike. It’s true – inflation, when the prices of goods and services increase substantially, can be a headache because everything we buy gets more expensive. In short, what your money can buy today, it cannot buy tomorrow – that includes your everyday food from the supermarket as well as handbags from Louis Vuitton. In France, the inflation has reached a record high of 6% in February 2023 due to a jump in energy and food prices by 15% ever since the war between Ukraine and Russia started last year. How does that affect the real estate market? On the one hand, interest rates are tied to inflation. That means the higher inflation goes, the higher are interest rates for borrowing money from the banks. In a nutshell, many real estate deals fall flat as they become unprofitable. However, there is also a silver lining: Accommodation prices for short-term rentals are linked to inflation as well, which means that operators can charge higher prices and have higher returns on their investments. As the saying goes, there are two sides of every coin.