Over the past 10 years, Monaco has become the most expensive real estate market in the world, increasing by an average of 7% annually.
Since the Principality is severely constrained by its 202 hectares of territory, the limited property market has created a housing shortage. The remaining unused large-scale building plot is currently under development, with its 9,755 m2 dedicated to the Testimonio II project. To make up for its limited development space, the city-state has a long history of reclaiming land over the Mediterranean Sea – which now accounts for 40% of its size. At the same time as the quickly-descending seabed allowed for the famous deep-sea harbor, it makes any further expansion extremely costly and technically challenging, as illustrated by the development of the new Portier Cove Mareterra.
Given the region’s land restrictions, it is highly unlikely that there will be a surge in the number of new residential spaces available, though there will certainly be renovations to existing buildings and houses. Investors will be protected against severe or prolonged drops in property prices in favor of regular price appreciation. What’s more, thanks to their significant wealth, Monaco’s property owners tend to focus more on the amount than the duration of a sale, as they can afford to wait to secure their desired price.
In more detail, the increased cost of housing has been driven by an influx of foreign nationals – primarily families – who are attracted by the area’s many benefits. In turn, this has led to a stronger interest in and a premium for larger properties. Combined with the increased fiscal pressure around the world, this should enable the Principality to maintain its attractiveness and reinforce property prices.
Generally, the most expensive neighborhood is the central district of Monte-Carlo. The outer and more residential areas, like Jardin Exotique and Saint-Roman, tend to be more affordable. Our calculations show large variations even within districts, such as a 35% price difference between the Carré d’Or and the rest of the Monte-Carlo district, and a 30% price difference between the Port Hercules area and the rest of La Condamine.
If you have any questions about your real estate investment in the Principality, please reach out to the Viviani Champfleury Barco team via email at [email protected] or by phone at +377 97 70 24 00. We will be glad to assist you by drawing on our 30 years of expertise.