MONACO REAL ESTATE MARKET TREND AND OUTLOOK FOR 2018
Average value of transactions on the Monaco real estate market [2000 - 2017]
Looking at 2017, the average value of transactions on the Monegasque real estate market decreased by 6% compared to 2016. This decline is the result of rising nominal interest rates in the United States and the quantitative easing program in Europe, both followed by rising government bond yields. Investors must therefore support higher interest rates on their investments.
That said, there have never been two consecutive years of decline in the average value of transactions in Monaco's real estate market. All previous crises (see chart above), regardless of the size of the impact on the average deal value in the first year, have all followed a rapid recovery, with investors taking advantage of the opportunities created by falling prices. The average value of transactions has steadily increased since 2000 and there is currently no reason to change this long-term trend.
Looking in more detail 2017 with the table above, we observe that the price per m² of large apartments was in fact the main segment impacted by the rise in interest rates with a decrease of respectively 14.6% and 14.0% in the price per m² of 4 rooms and 5+ rooms. On the other hand, the prices of smaller apartments increased respectively by +10.7%, +10.5% and +2.2% for 3 bedrooms, 2 bedrooms and studios in Monaco. The reason for this is that smaller apartments benefit from a wider market, with more investors able to pay them and offer on average a higher profitability than large apartments when rented.
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