The Principality of Monaco is a small, sovereign, neutral, safe, and independent state. It is endowed with a favourable tax system, characterized by an international context of residents from over 140 countries worldwide.
A place to live, with rich culture and sporting events, favoured by a mild and pleasant climate, as well as picturesque and characteristic landscapes.
Its real estate market expresses the highest values in the world, but unlike other similar real estate markets (New York, Paris, London, Hong Kong, Milan, etc.), Monaco has historically assured steady returns and continuous and uninterrupted capital growth, being less volatile and with low risks.
Let us therefore explore this real estate market which has unique features in the world.
Possible Real Estate Investments.
First, anyone can invest in the Monegasque real estate market. Thus, it is not necessary to have residency or the legal headquarters of a company in the Principality.
The offer of properties suitable for investment is limited. Nevertheless, by relying on a serious, recognized, and reliable real estate professional, this aspect does not represent an obstacle.
You can choose between two types of property:
- a newly built property (within five years of completion of the construction work) called “ventes” or “sales”
- a used property on the resale market, called “reventes“
In the first case, the buyer must also bear the cost of value-added tax (equal to 20%); in the second case, it is not due.
The real estate market in the Principality of Monaco is mainly characterized by transactions of residential units and, to a lesser extent, offices, and shops. Transactions involving the few villas within the two square kilometres of territory, as well as industrial/craft properties, are of little significance.
Since 2004, the IMSEE (Monégasque Institute of Statistics and Economic Studies) has published an observatory of the real estate market focusing on sales and resale of residential properties. There is still no similar observatory for real estate rentals.
Monaco Real Estate market in 2023.
Historically, in the Principality, there have been few sales of new homes compared to a much larger number of resales of “used” properties.
In the last ten years, between 11 (in 2014) and 88 (in 2022) prime sales were concluded. A total of around 200 sales, with a value of approximately 450 million euros. However, 2022 and 2023 were particularly profitable for the segment of new built units, breaking the billion-euro mark in 2022. With a slight decline, but still above the billion, in 2023.
This is a physiological event, due to new real estate developments onto the market and the strong recovery after the Covid-19 pandemic.
In 2023, 416 real estate transactions were completed in Monaco, including 388 resales and 28 new properties. Although this represents a decrease of about 20% compared to 2022, in terms of volume, the total value of transactions of 3.23 billion euros remains at record levels, slightly lower than in 2022.
The main reason for the decline (-68.2% compared to the previous year’s record) is the lack of new constructions on the market.
Used properties also decreased, by over 10% compared to their lowest level since 2012, mainly affecting small types such as studio-apartments, and one-bedroom apartments. Two-bedroom apartments (3 pièces), which, according to the regulations to obtain residency in the Principality, allow for accommodating an average family of 4 member, and three-room apartments are the only types increasing.
Another record in 2023 was the average selling price per square meter, amounting to €51,418, just below 1% compared to the €52,000 recorded in 2021.
Within the 8 districts of the Principality, Monte-Carlo confirms the most sought-after for those wishing to buy a property in Monaco: here are located the Monte-Carlo Casino, the most luxurious shops of the Carré D’Or, and the most beautiful buildings, including the Park Palace, the Mirabeau, the Monte Carlo Star, or the Metropole, with its shopping centre. Here are located approximately 26% of the total surfaces of real estate units in the Principality, where on average between 30% and 35% of the total annual resale transactions take place, reaching 60% together with the La Rousse district.
The district that is proving to be interesting is La Condamine, where transactions worth approximately 263 million euros were recorded in 2023, about 83% more than in 2022, and the highest increase in the average price per square meter was observed, rising from about 45 thousand euros to about 54 thousand euros: an increase of about 20%!
The district that saw the highest price increase in 2023 was Larvotto, where the average price per square meter is €65,857, an increase of 5.6%, driven by the development of Mareterra.
In general, the average price per square meter in 2023 remains firmly above 50 thousand euros, a threshold exceeded in 2021.
Future Perspectives.
“In light of the increasing historical trend of unit property prices in the Principality, a rebound in property values growth is to be expected“, commented Andrea Mulas, Senior Asset Manager at Agedi.
“The downturns and uncertainties in price trends in the 2021-2023 triennium should be overcome in 2024, considering that the effects of recent global events (the Covid-19 pandemic, the Russo-Ukrainian conflict on Europe’s doorstep, the Israel-Gaza conflict, high interest rates, inflation, and the surge in commodity costs, etc.) are now being balanced out.”
“This will apply more strongly to the resale market, which is more sensitive to external macroeconomic phenomena than new transactions“, concludes Mulas.