_Monaco remains in poll position
Monaco has led our annual global comparison of residential values since 2008 and prices continue to drift higher. Luxury residential prices in Monaco reached €53,000 per sq m in the second quarter of 2017, although super-prime values, such as those for the most exclusive properties in Monte Carlo’s Carre d’Or, can extend beyond €100,000 per sq m.
In last year’s report we highlighted the widening gap between the price of resales and new build property as well as what, at first glance, appeared to be a strong pipeline of new residential development.
However, most of this new stock remains a long way from breaking ground. Indeed, IMSEE, Monaco’s Statistics Office, reported that in 2016 not one new residential property was completed. This is likely to put further pressure on prices in the short to medium term.
"The tail end of 2016 saw sales activity soften; however, Macron’s victory in May 2017 brought with it a new sense of optimism. "
For Monaco, the flow of wealth across its borders is as much to do with the ebb and flow of foreign government’s tax and economic policy as it is to do with the longstanding appeal of the Principality.
According to our survey of almost 900 of the world’s leading private bankers and wealth advisors, political uncertainty is considered the greatest threat amongst UHNWIs – both globally and in Europe – when it comes to the creation and maintenance of their wealth over the next five years.
Perhaps surprisingly, Monaco is home to a large volume of old residential stock in need of refurbishment. However, in recent years buyers are displaying a greater propensity to undertake this work as the lack of supply starts to pinch.
Many of these buyers are long-established Monaco residents looking for an investment, aware that new arrivals often prefer to rent before deciding where to buy. Shrewd investors are also aware of the lack of market liquidity in Monaco – the wealthy remain discretionary vendors – meaning such investors can rely on long-term tenants.
"Not only does Monaco play host to more than 850,000overnight tourists per annum, but more than 50,000 employees commute into Monaco from France and Italy each day. "
To keep pace with this influx, public investment is being ploughed into Monaco’s infrastructure, leisure and retail facilities.
Aside from the 2014 upgrade of Monaco’s Yacht Club, the new €107m Albert II Tunnel opened in 2016 helping to reduce traffic congestion around Jardin Exotique.
Work has also recommenced on Le Portier project, but perhaps most significant is the new Ilot Pasteur regeneration project which, by 2021, will deliver a new home for Charles III College, a media library and concert hall. The €220m scheme will provide better links between Condamine and Fontvieille and add a new funicular cable car to improve access.
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For further information please contact Kate Everett-Allen