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Property gaining value in Monaco housing market
Monaco is a country so small, it’s measured in acres, not miles. The whole of the principality could fit into New York’s Central Park. Yet as diminutive as it is, Monaco is the international epicenter of glamour. In this narrow strip of land between the southern Alps and the Mediterranean Sea, millionaires make up nearly a third of the population.
There’s much to attract high net worth individuals: security, privacy and favorable tax laws. There are no income or personal gains taxes. That, of course, is not the whole story.
Monaco offers an exceptional lifestyle in the heart of Europe. Sunny summers are ideal for yachting enthusiasts. Come winter, a handful of ski resorts are located within a two-hour drive. Its attractions are epic scale, from the Formula One Grand Prix to the famed Casino de Monte-Carlo Casino, an architectural masterpiece with its bas-reliefs, frescoes and sculptures. So many want a piece of this seaside city-state that native Monegasques are minorities in their own country, making up just 20 percent of the population.
No restrictions are imposed on international property buyers who come house hunting knowing land is limited and no bargains are to be had.
The Monte Carlo district is a jewel in the Grimaldi dynasty crown. The priciest of Monaco real estate is in the Carre d’Or area around the glitzy central square, Place Du Casino. Modern luxury high rises overlook Larvotto Beach. A penthouse here, is among the world’s most expensive. Fontvieille is the newest residential area. This man-made waterfront neighborhood, which includes sports facilities, a heliport, marina and restaurants, was created from land reclaimed from the sea in 1981. The quarter of La Condamine is one of the oldest, home to Port Hercules, Monaco’s only deep-water–and mega yacht-jammed–harbor.
With supply in short shrift, Monaco still beat out Hong Kong as the priciest luxury home market in the world, according to a yearly overview of the principality released this week by the consultancy Savills.
The principality trounced the Chinese SAR as the average home price in the former climbed to € 4.5 million ($5.26 million) in 2017, up 6% from the previous year.
“Wealthy residents hold their property for long periods, while little new stock is added,” Paul Tostevin, associate director at Savills, wrote in the Spotlight report on Monaco.
With an average price per square metre of € 41,300 per square metre ($4,500 per square foot), Monaco remains the most expensive residential market in the world – 13% than prime Hong Kong, the second most expensive market.”
Home to 139 nationalities, Monaco suffers from “extreme” land constraint. New development sites rarely become available in the principality, with on going major schemes like Sporting d’Hiver set to deliver only properties to rent rather than buy.
The dearth of available homes to own in the principality is working against strong demand from high-net-worth individuals around the world. Only €2 billion ($2.3 billion) worth of homes were sold in Monaco last year, a staggering 23% dive from sales of €2.7 billion the previous year.
Project Portier, which began last year, is set to add six hectares and 54,980 square metres of new habitable space of new land to Monaco, but even this will make “only a dent in the supply shortage,” researchers stated. “We expect new build transaction volumes to drop off significantly in the near term.”
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