Monaco : a world apart
The Principality of Monaco cannot be compared to any other destination, whether in terms of its real estate, prices or clients. While striving to finally get rid of its “tax haven” tag, the second smallest state in the world after the Vatican continues to prove its uniqueness.
A surface area of less than 2 km2, 32,796 inhabitants according to the 2008 census, 6,089 Monégasques, 32 % French residents, 20 % Italian, 5 % British and 24 % composed of no less than 125 other nationalities... With such a pedigree, it’s hardly surprising that the most densely populated state in the world, surrounded by the French towns of Cap d’Ail, Beausoleil, Roquebrune-Cap-Martin and La Turbie, does not behave like everyone else. Not content with its original territory, it began by reclaiming land from the Mediterranean : the Larvotto area, Fontvieille, then the harbour-wall in 2003. It would have obtained almost 25 more acres if HSH Prince Albert II had not decided, in December 2008, to stop the maritime expansion project for environmental, and probably economic, reasons. In its place stands the impressive Tour Odéon, a 49-floor twin tower. The service sector, VAT and real estate are the main sources of the Principality’s income. Tourism comes third : the Grand Prix is Monaco’s biggest draw, with the Casino, the Prince’s Palace and the Museum of Oceanography also attracting many visitors.
“The crisis is on-going, but one can now glimpse the first signs of recovery, for both sales and rentals, whatever the type of product or buyer profile, from studios to large surface areas, from investors to residents,” says Eugenia Petrini of La Costa Properties Monaco. The Belgians, Swiss, Italians and Germans are still very present, the English, more withdrawn. Russians often prefer the rental system. All are looking for a quality life-style, security, a mild climate, political stability, a central geographic location, good rail and air services, an appealing array of cultural and leisure facilities, and reputable schools. In many ways, this microstate borders on excellence. Before the crunch of 2008 and the collapse of the world’s stock markets, Monaco ranked second among the world’s most expensive cities and prices soared to close on 80,000 €/m2. Two years later, the price per sq. metre in one benchmark address, the very prestigious Mirabeau apart-ment building in the middle of the “Golden Square”, has dropped to 50,000-60,000 €. Desirable properties, ie. with a view of the sea, range from 20,000 to 30,000 €/m2 on Boulevard d’Italie, 45,000 to 50,000 €/m2 for the finest residences in Fontvieille, 35,000 to 40,000 €/m2 for apartments in Le Shangri-La on Port Hercule, whilst the admission ticket - that’s to say, a basic apartment in an old building, with no particular view, parking place or terrace - hovers around 18,000-20,000 €/m2. The average transaction is approx. 30,000 €/m2 as soon as a sea view is one of the criteria. The situation is the same for rentals : in 2007, an apartment of 500 m2 with terraces of 200 m2 cost 35,000 € per month. Today, if the owner wants to keep it occupied, he must be prepared to lower the rent to 29,000-30,000 €. A studio in the Park Palace rents for 2,000 €/month, a 1-bedroom apartment for 2,500 €, a 2-bedroom apartment for 4,000 €.
“Of course, the real-estate market and evolution in the tax set-up are closely related. But much less so than one might think,” says Brigitte Bermond of Dotta Immobilier, recalling the strong points of the Principality, security and convenience. Furthermore, inter-governmental agreements have hardly affected activity. Which can’t be said of the Italian “scudo”, responsible for the recent departure of this trans-Alpine clientele and thus a rise in housing stocks. Since this summer, the situation seems to be loosening up. Estimated correctly, a property can find a buyer within six months. The 1-2 million € bracket, ie. small apartments acquired as rental investments, is doing relatively well. In less frequent demand, the “exceptional” property nevertheless attracts interest. The recovery is as slow as the crisis was brutal, with potential buyers deeply affected by the health of global financial markets. “Monaco’s property market has always tended to get carried away in boom times, then drop like a stone. But generally speaking, these periods have been short-lived and the consequences measured. For the first time, euphoria lasted a decade and the awakening has been painful, especially as the set-back is worse on a worldwide scale,” notes Lucien Mostacci of Miells & Partners. But no-one seems particularly worried : “Clients in search of bargains are already on the look-out. And Monaco does not lack resources. Even at the market’s low ebb, investors are taking up position”. The real obstacle lies in the attitude of sellers, unwilling to consent to lower prices. They should, in fact, put the past behind them : prices for acquisitions have dropped 30 %, rentals by 20 %. A superb apartment facing the Mediterranean is pegged at around 30,000 €/m2 on high floors of Le Périgord or L’Annonciade, 40,000-50,000 €/m2 in the Parc Saint-Roman, Monte-Carlo Sun, Les Terrasses du Port or Seaside Plaza, and 50,000-55,000 €/m2 in the Park Palace.
By Laetitia Rossi
