Monaco is an independent principality of 2,02 square kilometer for approximatively 38’400 inhabitants located on Mediterranean coast between France and Italy. This small territory landlocked between the alps and the sea attract nevertheless investors coming from all around the world. Some of them come to enjoy the great living quality that only Monaco can offer in Europe and some for tax heaven that Monaco has created for its inhabitants. Thus, the population in Monaco is very international with many different nationalities represented, such as the French with 10.000 persons, then the Italians with 6.600 persons, the British with 2.600 persons, the Germans with 2.600 persons, the Swiss with 900 persons, the Americans with 250 persons and the Russians with 250 persons. For the same reasons, many international VIP such as the singer of the band Scorpion and the president of the investment fond “Realstone” have settled in Monaco.
The country has a dynamic real estate market and over the last 10 year, about 400 properties for a volume of 1,1 billion euro have been on average traded per year. Volumes and transactions are currently at an historical high level as showed on the graphic below. The current bullish trend started in 2010 has been catalyzed by the progressive decrease of the interest rates on property loans which are currently at an historically low level. A trend reversal is not expected even is the amount of transactions has decreased in 2017.
Monaco is the city with the world highest price per m² thanks to its exceptional living quality and the dynamism of its economy. An interesting fact about the real estate market of Monaco is that the m² price of small apartments (one or two rooms) are on average cheaper than the m² price of larger apartment as showed on the graphic below. The reason is that many investors are looking for a large apartment to live with their family and as the market of large apartments in Monaco is limited, prices are increasing quickly. The convergence of the curves of the price per m2 of small and big apartments observed in 2017 is due to the limited number of large apartments traded in 2017. The average price per m2 of large apartment observed in 2017 is thus not representative of the market prices.
Most of the investors in Monaco are looking to achieve yield on their investments in purchasing and reselling properties at a higher price in a time lapse of 1 to 4 years. But what about long term investors willing to build up an estate of properties that will provide them with regular incomes over a long period of time. Where should they invest and in which type of properties? The following table made from the current sale and rent prices of about 200 properties in Monaco shows that investments in Studios offer in most of the districts in Monaco, the highest rental yields. In the same way, the less popular districts such as the Condamine and Monaco Ville offer on average higher rental yields than the most popular ones, such as the Carré d’or and Monte Carlo. We therefor recommend our exclusive international investors willing to achieve the highest possible rental yields from their real estate investments in Monaco to focus their researches on Studio apartments. And if possible to consider only Studios that have enough widows and space to be turned into 2 rooms apartments. Thus, their investments shall not be threatened in case the law on residence permit changes and require new residents to live in at least a two rooms apartment in Monaco.
The real estate market of Monaco is separated between the apartments of the free market and the apartments belonging to the State. Only apartments of the free market can be purchased by foreigners. With a parc of about 17.000 apartments and for an average of 420 transactions per year, an apartment is traded on average one time every 30 years. This average of 30 years is however hiding very heterogeneous situations depending on the districts. As we can see on the graphic below, the districts of Monte-Carlo and La Rousse – Saint Roman are representing together about 50% of all transactions in Monaco. Then come the districts of Fontvielle, la Condamine and the Jardin Exotique with about 10% of the transactions per year for each of them. The districts of the Larvotto and Monaco Ville are the districts with the least amount of transactions per year.
Monaco Properties is an exclusive real estate agency based in Monaco with an in-depth experience of the luxury property market of Monte-Carlo and the French Riviera. We are family owned and our values are driven by the desire to offer the highest service quality to our exclusive clients coming from all around the world. We will strive to provide you with the maximum satisfaction in your sell, purchase or rental experience as well as exceptional personal services to facilitate your installation in Monaco and France.
Do not hesitate to contact us for more information on the real estate market of Monaco.