Following several years during which supply has been limited, Monaco’s new-build offer is finally expanding and, along with it, a price gulf is emerging between resale homes and new properties.
Despite covering an area no larger than Hyde Park and Kensington Gardens, the principality -famous for its yachts, casinos and prestigious Grand Prix - is home to no fewer than 12,200 millionaires. Underlying its exclusivity is the fact that Monaco’s population of super-rich inhabitants (those with net assets of US $30 million and over) has increased by 62% over the last decade.
Using figures provided by the Monaco Statistics Office, global property experts Knight Frank report that average property prices have increased by 27.8% over the past five years. But what is most striking about the rise is the widening gulf between the price of existing properties and those in new developments.
During 2015, the average price of resale properties in Monaco was reported to be €3.5 million. In stark contrast, the average price of new-build apartments stood at a jaw-dropping €11.9 million. The traditionally constrained supply in the low-tax Riviera hot-spot was relieved somewhat last year when close to 200 new apartments, in three prime developments, hit the market.
These new developments - Tour Odéon, Le Meridien and Le Petitie Afrique – will shortly be supplemented by the delivery of a further project, Testimonio II. This scheme will provide an additional 150 luxury apartments, promising a level of finish not seen in a new development in the principality in recent years. Alongside private property, Testimonio II will also include state housing and a new international school catering for 700 pupils.
Demand for property in Monaco is high but the report indicates that the buyer profile has changed over recent years. To begin with, the age of those seeking residence is lower than it was ten years ago. In addition the nationality of buyers is increasingly defined by their purchasing power.
At the lower end of the market (below €10 million) British, Italian, Swiss and Northern European buyers have been the most active over the past twelve months. When it comes to apartments above this figure, Russian, Chinese and Middle Eastern house-hunters and investors are the most likely bidders, reflecting a current trend in the global luxury property market.
The majority of sales activity in 2015 took place at the lower end of the market. Just over 500 resale properties changed hands in this period, with 83% of the total priced below €5m. Niccolo Marzocco, Commercial Director of the property development company Groupe Marzocco, says that the global financial crisis did nothing to diminish the appeal of Monaco among wealthy individuals and families.
“Some people left, but far more have arrived,” he told Knight Frank. “They want to live here full-time so they want bigger apartments, better shops and good schools. The requests for residency have never been higher than in the past 10 to 15 years.”
