Sophie Chick, head of Savills World Research, said, “Looking to the year ahead, while the economic impact of Covid-19 is still largely unknown, the residential market in Monaco is well placed to weather the storm of any economic downturn.

“We expect prices to remain flat for a period or potentially show a very small increase due to the lack of supply and consistent demand. However, we do expect resale transactions to slow as the world pauses to assess the situation.”

Taking the Global Financial Crisis (GFC) as an example, prices per square metre in Monaco declined by 13% in 2009 compared to 2008; however a year later, they had returned to pre-GFC levels. Transaction volumes, however, took three years to recover to 2007 levels.

Transaction volumes across Monaco fell from 523 transactions in 2018 to 462 transactions in 2019. Due to a lack of new build supply, the number of new build transactions fell 54%, significantly contributing to the overall decline in sales numbers. Transactions of re-sale properties also saw a small fall. However there was one segment of the market that bucked this trend; sales of properties above €10m increased by 64% year on year.

Irene Luke, head of Savills Monaco, said, “The increase in the number of high values sales was partly driven by an uptick in the volume of villas being sold, often for redevelopment, and Monaco’s continued status as a premier location to live and invest.

“Demand for larger properties is also being driven by the increased scrutiny of buyers claiming residency to ensure that the property being purchased meets the needs of the entire family. This trend is expected to continue after Covid-19 has passed as families prioritise space.”

Like capital values, Monaco ranks as the most expensive location in which to rent residential property with an average rent of €126 per sqm per month. This is 60% higher than New York, the second most expensive location in the Savills Index.

Over the year to February 2020, rental values in Monaco increased by 20% across all property types. This high demand and corresponding rental growth of larger properties mirrors the sales market in that renters need to demonstrate that the property accommodates their needs - in order to apply for a residence permit.

Sophie Chick, concludes, “The global reputation of Monaco ensures that demand levels outstrip supply in this space-constrained location. Going forward, though there are new developments in the pipeline, the number of promised new units are fewer than needed. These dynamics mean that prices, although the highest in the world, are expected to remain stable.”

Ends