Monaco real estate sales market reaches new records, latest analysis shows

Monaco’s residential real estate market experienced a record year in 2014 and a weak euro is seen as offering buyer opportunities, according to the latest property analysis report.

The number of residential sales exceeded their 2007 peak for the first time in 2014, with a combined value of €2.4 billion and according to the report from international real estate firm Savills prices are stable and Monaco remains one of the world’s most expensive property markets.

In total, 555 residential properties traded in the resale market in 2014, putting the number of deals 21% above 2007 levels, however, in US dollar terms the Principality has slipped to second place behind Hong Kong, due to a weak euro.

The very upper tiers of the market have been the most liquid, and as a consequence transactions in euro terms reached new records. Some €2 billion of property traded in the resale market in 2014, compared to the previous peak of €1.1 billion in 2008, an increase of 91%.

While total sales volumes by both number and value have reached new highs, average prices have remained static. ‘This, set against a weak euro has made Monaco property look cheaper to some foreign buyer groups, particularly those with US dollars,’ the report says.

For example, a €2 million property cost US dollar buyers $2.16 million in April 2015, compared to $2.77 million in April 2014, a reduction of 22% in a year. The same €2 million property to a British sterling buyer cost £1.44 million in April 2015, compared to £1.65 million a year prior, a reduction of 12%.

Investors have been active in the €1 million to €10 million bracket, seeking easy to manage properties to feed into the rental market. Monaco benefits from a range of end users, and second home purchasers and those seeking primary residences in the super prime segment have been active too.

The report points out that Monaco is unusual in that almost all of its residential stock could be considered ‘prime’. The ‘mainstream’ housing stock, in which many of its workers live is found in bordering French towns.

Given Monaco’s restricted space, 95% of its housing stock is in the form of apartments, with villas making up the balance and the Principality has a large rental sector, much of it institutionally owned and let to Monégasque residents.

In the ultra-prime sales market British, Russian, and Middle Eastern buyers have been especially active in the last year. Monaco’s ultra-prime residential markets are focused in Monte Carlo, around the famous Place du Casino. The most desirable area is Carre D’Or, followed by neighbouring Fontvieille, which also offers a variety of commercial uses.

Sought after buildings can be found throughout the Principality, with the majority of new ultra-prime schemes developed in outer districts due to limited land availability in the ultra prime core.

The report concludes that the unique offering of Monaco’s global appeal and its extremely limited land supply will all combine to keep Monaco’s real estate prices high with few or no mechanisms for them to fall.

‘We anticipate they are at, or near, a high plateau, in common with many other ultra prime markets globally and will be for some time to come,’ it adds.