Blog on real estate in Monaco
In March 2022, the new Propylée building located in the district of Jardin Exotique at the border between Monaco and Beausoleil will be ready to be inhabited. The new building of 8 floors will offer 66 sumptuous apartments nicely agreemented with green vegetation overlooking Monaco and the sea. Also part of the project, a large parking as well as new shops and a tunnel linking the building to the city center of Monaco. This project will revitalize the most peripheral district of the principauté of Monaco and offer a great living quality to its inahbitants. The Propylée building will be built above the road to prevent the noise generated by the cars passing to disturbe the quietness of the place. Large terraces at each floor will allow their inhabitants to benefit from the stunning views
The real estate market of Monaco has been particularly dynamic since the beginning of 2018. As stated in our newsletter from February 2018, there has never been tow consecutive years of decrease in the average value of real estate transactions in the principality. The trend of the first half of 2018 is confirming this statement and we believe that the dynamism of the market is currently being supported by the so-called wealth gains effect. As investors are experiencing extraordinary positive returns from their financial assets invested in the equity markets of developed countries, they can thus reinvest their gains in real estate properties. The graphic below shows the extreme strong correlation between the logarithm of the 12 months moving average of the S&P 500 Price Index (blue line) and the 12 months moving average of real estate transactions in Monaco (yellow line). The S&P 500 is the worldwide leading stock market index of the 500 largest companies in the United State (US) and it is experiencing a very solid growth thanks to the strengths of the US economy.
The Larvotto and La Rousse districts in Monaco are through several urban projects being deeply transformed. A well advised investor would not need too long to understand that this is the place to put your money in. With the Odéon tower, second highest building on the Mediterranean, offering the world most expensive properties, prices are being pulled into the high. And momentum is expected to keep on going, with two new urban projects that are under construction and will be both finished in the coming years:
Average value of transactions in Monaco real estate market [2000 – 2017]
Looking back at the year 2017, the average value of transactions in the real estate market of Monaco decreased from 6% in comparison with the year 2016. This decrease is the consequence of the rise of the nominal interest rates in the US and the reduction of the quantitative easing program in Europe, which were both followed by the rise of government bond yields. Investors have thus to support higher interest rates on their investments.