If cities such as London, New York and Hong Kong are the crown jewels of global real estate, then Monaco is the rare gem. A centre of global wealth, prices for residential property in the Principality are being pushed to an all time high says international real estate advisor Savills in its Spotlight on the Monaco Residential Market launched today.
Monaco is one of the few places in the world that shares the characteristics of a world city, a centre of commerce and a recreation playground for the super rich. This combined with demand for a limited pool of stock means that property prices are the highest globally at €91,000 per square metre, ahead of Hong Kong at €85,500 and topping the Savills World Ultra Prime Index.
With an area of just 6% the size of Manhattan and 3% the size of Hong Kong Island, Monaco is particularly supply and space constrained. Meanwhile demand for homes in Monaco from the world’s ultra wealthy is high and it is the sixth most important world location for real estate holdings among this group.
While the number of residential resales fell by 55% between 2007 and 2010, forced sales were limited and most owners were able to ride out the tough market conditions. However, driven by demand from the world’s super rich seeking a save haven for their wealth, transaction volumes recovered to within 13% of their former peak by 2013. Even greater liquidity has been seen at the very top end of the market where transactions, by total monetary volume, now exceed their 2007 levels by 23%.
The resilience of Monaco’s residential market is attributed to the diversity of buyers it attracts. The Principality is home to residents from 128 nationalities and those most active in the prime markets include British, Italian, Belgian, Swiss, Russian and Eastern European buyers. A centre of wealth and commerce, Monaco is an important finance services hub and is home to the highest density of Ultra High Net Worth Individuals in the world.
In order to remain attractive to the global elite, the Principality is building skywards and into the water on reclaimed land with new product comparable to that found in the best addresses in London, New York and Hong Kong. There is also scope for refurbishment and ‘ultra-priming’ older blocks and towers.
Paul Tostevin, associate director, Savills World Research, concludes, “We expect continued price appreciation in Monaco’s residential markets due to demand from a growing base of global Ultra High Net Worths against restricted levels of new supply.
“Prices are still up to 20% below their former peak however we foresee they will return to peak within the next 12 months with anticipated growth of around 20% before mid- 2015.”