Monaco, number 2…
In the rankings of the world’s most expensive cities. The Principality occupies the same place, after the Vatican, if it is based on surface areas. The rarity of properties available for sale here deprives the situation of any market logic. Analysis of a sector with no competition...
A little enclave in the French “département” of the Alpes Maritimes, Monaco stretches out along a coastal strip 4 km long, limited by the mountain spurs of the “Tête de Chien” and Mount Agel. With 32,543 inhabitants of 125 different nationalities, The Principality is also the most densely populated city in the world. Even though its Princes have continued to regain land from the Mediterranean Sea, the result has never been sufficient to satisfy those wanting to reside near “the Rock”. The victim of its own success, Monaco suffers from a penury of accommodation, both for sale and to rent. Constantly higher than supply, demand seems quite insatiable. When France fears a slowdown, estate-agents in this micro-state still rub their hands.
Arash Shams of Royal Riviera Immobilier points to the recent price rise per sq. metre, especially in the Golden Square around the Place du Casino. “It can attain 50,000 €, even 70,000 €, for outstanding apartments,” he says. A recent survey carried out by the Knight Frank and City Private Bank groups confirms his observation. Monaco takes second place in the rankings of the world’s most expensive cities with an average price of 35,000 € per sq. metre, behind London and ahead of New York, Hong-Kong, Tokyo and Cannes. Its real estate follows a dual logic, relating to both neighbourhoods and individual apartment blocks. In the Golden Square, the Park Palace, Les Floralies, the Métropole and Monte-Carlo Star are highly sought-after. Port Hercule comes next. Its residents, keen on liveliness, the Grand Prix and Monaco Yacht Show, readily accept to forget about the noise. A top-notch apartment in a complex as prestigious as the Shangri-La will cost from 37 to 40,000 € per m2. Expect prices 15 to 20 % higher in the case of a penthouse. At Fontvieille, a neighbourhood of approx. 55 acres regained from the sea, clients have families and are looking for social infrastructures, boutiques and the amenities of the Louis II Stadium ; they also like residences with their own pools. Such as the Seaside Plaza and Les Terrasses du Port, with price-tags between 30 and 35,000 € per m2. The Boulevard d’Italie and Larvotto neighbourhood to the east offer the immense advantage of beaches and tennis courts within walking distance. Examples include the Monte-Carlo Sun and Parc Saint-Roman, from 25 to 30,000 € per m2. At 18 to 20,000 € per m2, the Exotic Gardens neighbourhood is of more interest to local residents, as is La Condamine. As for the Rock of Monaco, it belongs almost exclusively to the “Monégasques” (Monaco nationals), accounting for 19 % of The Principality’s total population.
“This very active market is affected by significant demographic pressure. Prices have risen considerably over the past two years and the trend shows no sign of abating,” comments Trevor Gabriel of Monaco Villas. The success of large apartments says a great deal about the clientele and its motivations. Ever younger investors now move into Monaco with their families. The tax set-up is, of course, an important factor in their decision. Residents, except for the French and Americans who have to pay tax in their countries of origin, pay no income, profits or inheritance taxes. Neither is there any land or residence tax in the Principality. This, however, does not totally explain its popularity. “The many restaurants, festive night-life and particularly rich cultural activities all contribute to a quality life-style. Security and the proximity of the dynamic Nice Côte d’Azur international airport are other undeniable assets. London is 2 hours away, Geneva 45 minutes,” explains Arash Shams. The glossiness of real estate in Monaco has an effect on the market in the Alpes-Maritimes, the Var and even the Bouches-du-Rhône. The English manager of Monaco Villas notes a tendency on the part of buyers to treat themselves to a holiday home in the South of France.
“The Russians are strengthening their presence in the Principality,” notes Lucien Mostacci of Park Agence, “a serious and very wealthy clientele from the world of industry”. They demand extensive living space (5/6 main rooms), adore luxury and play a significant role in rising prices. They account for 20 % of puchasers. The English, representing 30 %, go more for apartments with 3/4 main rooms. Italians, accounting for 20 % of buyers, are looking for studio flats, 1- or 2-bedroomed apartments. The high rate of mobility slightly attenuates the penury of accommodation. Especially as new properties do not offer large-scale solutions. Only one or two new apartment blocks come onto the market each year, sold directly by the builders without any advertising. A real breath of fresh air will undoubtedly come from the construction work initiated in the Larvotto neighbourhood. Though the first fruits of this undertaking will only be available in 2014.
According to Arash Shams, the rental market is approaching saturation, especially for large apartments. With an occupancy rate of 95 %, the minimum waiting time ranges from three to four months. Studio flats cost on average 1,500 € per month, 1-bedroomed apartments 2,500 €, 2-bedroomed from 3,500 €, 3-bedroomed 7,000 €, and exceptional examples will fetch 10,000 € and more.
By Laetitia Rossi.
