Monaco Real Estate: Navigating the New Wave of Luxury Living in 2024
2024-06-21
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The Principality of Monaco has long been a favored destination for the world’s wealthiest, thanks to its political and economic stability, favorable fiscal environment, and excellent climate and quality of life.
This long-standing appeal has contributed to a booming residential property market over the past decade and beyond. Since 2010, the total volume of transactions has increased by over 500% and the number of sales has grown by 130%, which for a land-constrained microstate perched on the Côte d’Azur is no mean feat and is a testament to the ongoing appeal of Monaco and the fact that prospective residents are willing to pay increasing sums to buy into the Principality’s lifestyle. While many markets began to struggle in the second half of 2022, Monaco real estate experienced a bumper year. Over the year, there were 520 transactions across the Principality, which while lower than the highs seen between 2014 and 2016, is 10% above transaction volumes seen in the past five years.
A Decade of Growth: The Numbers Tell the Tale
After a record-breaking year for pricing in 2021, where prices surged past the €50,000 per square meter barrier, 2022 saw the smashing of another record. For the first time, total transaction volume came to €3.5 billion for the year, nearly three-quarters of a billion euros higher than the previous record set in 2019. This record transaction volume has largely been driven by the new-build market, which also achieved record-high sales volumes. New build sales crossed the €1 billion threshold for the first time in 2022, precipitated by a large number of properties coming to market; 146 in 2022, which was the third highest number of deliveries ever behind 1993 and 2015. The 88 new build sales that Monaco achieved in 2022 were driven both by the high number of flats coming to market and also by the ongoing construction projects which have led to increased off-plan sales, and represented a nearly 300% increase over 2021 figures. New builds accounted for a record 34% of total sales in Monaco during 2022, an exceptional figure given the average share of new build sales has been approximately 8% of the total since 2006.
Record-Breaking Trends of 2022
The race for space continues in Monaco, both as a result of the pandemic causing global reassessment of housing needs, and because of a change in approach to residence card applications in recent years, meaning greater scrutiny of the size of properties rented or bought by prospective residents. This change has been filtering through the new build market, with many new build schemes offering larger apartments. As a result, the sales of apartments with three bedrooms or more increased by over €830 million in 2022 compared to the previous year and accounted for over 80% of the new build sales across the Principality. The number of resales in Monaco has returned to pre-pandemic levels. This rebound has largely been driven by the increase in sales of larger apartments, with two-bedroom or larger property sales increasing by 12% from 2021. Two-bedroom properties in particular saw the largest increase in sales with 103 properties transacting, an increase of 18% from the previous year.
The Quest for Space
The total volume of resales for the year totaled €2.35 billion, with 432 properties changing hands. Two-thirds of these properties were priced below the €5 million mark; however, increasing numbers of sales at the top end of the market are helping to support rising total sales volumes. The number of properties sold with prices above €10 million has increased by over 50% in a year and 300% over the past decade. For decades, the prevailing story of the Monaco property market has been one of chronic undersupply. For a microstate less than half the size of Central Park in New York City, this is hardly surprising.
Resale Market Resurgence
To try to meet the consistently high levels of demand, construction projects continue apace. There are two large projects in the pipeline: Mareterra, Bay House Monaco, and other smaller projects such as Le Luciana, and the second phase of Villa Portofino. The most ambitious of these developments, Mareterra, will add 110 apartments, ten villas, a new port, and a public park, along with other infrastructure, all built on land reclaimed from the sea. Each of these projects will bring much-needed stock to the Principality but will do little to keep up with the consistently high demand across Monaco. As with the rental sector in other prime residential markets, it is likely that the Monaco rentals market will see another strong year in 2023 as a result of increasing numbers of residents flocking to the Principality in search of quality of life, safe havens from global economic turbulence, and the fact that the sales and resale markets in Monaco are undersupplied. So many new residents will choose to rent before they purchase flats, further supporting rental market performance.
Future Developments: Meeting Demand
As with the rental sector in other prime residential markets, it is likely that the Monaco rentals market will see another strong year in 2023 as a result of increasing numbers of residents flocking to the Principality in search of quality of life, safe havens from global economic turbulence, and the fact that the sales and resale markets in Monaco are undersupplied. So many new residents will choose to rent before they purchase flats, further supporting rental market performance.
Conclusion: Monaco's Unstoppable Appeal
The 2023 Monaco real estate market has demonstrated resilience and adaptability in the face of global economic challenges. While the number of transactions has decreased, the total transaction value and average property prices have reached new heights. This trend indicates a growing preference for high-end, luxury properties, making Monaco an attractive destination for affluent buyers. Whether you are looking to invest in Monaco's real estate or stay updated on market trends, understanding these dynamics can help you make informed decisions. As we move further into 2024, monitoring these trends will be crucial for anyone involved in Monaco's real estate market.
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