Monaco’s Luxury property market overview

December 4, 2017

There are few places in the world where one would consider buying off-plan property eight years in advance, but Monaco is far from typical, states Knight Frank in a 2017 report on Monaco.

This glamorous pocket of the Côte d’Azur is unwaveringly desirable, thanks to the superlative location, lifestyle and fiscal advantages it offers. But it also has a minuscule supply of new property and a limited amount of land, which means that Monaco is a place where you need to plan ahead.

When a rare new development does go on sale, its properties are likely to be pre-sold, then sold again before completion. That is the case with two current schemes near the harbour, whose €2m starting prices may suggest luxury for many locations but are middle of the road for Monaco. The solution – albeit a complex and expensive one – is land reclamation. Monaco was just emerging as a playground for the rich when the American writer Mark Twain advised “Buy land. They’re not making any more”, yet that is precisely what Monaco does, with its only opportunity for expansion to extend into the sea.

The latest €2bn land reclamation programme will see six hectares of new land created from Sicilian sand. On it will sit 120 new high-end apartments whose prices will be in excess of €100,000 per sq m – which ultra prime stock in Monaco is already achieving. Of those 120 units, 50 have already been retained by the developer, leaving just 70 to sell with several years to go until completion. By then, who knows what stratosphere Monaco’s prices will have reached. Such is the demand for new waterfront homes that price will be little deterrent to buyers – and their tax advisers – who are thinking ahead with wealth preservation in mind for future generations of their families.

For those with ambitions for a home in Monaco but little appetite for the waiting game, the options are limited. A buyer who arrives with a handful of children and a nanny in tow may have five, at most 10, apartments that might be suitable. Much of Monaco’s older stock is being refurbished, but there is still a long way to go.

While the new generation of development is bringing higher standards of build and design and a new type of amenities to Monaco – Tour Odéon, for example, has a spa, concierge service and chauffeured Mercedes at residents’ disposal – the older properties usually need considerable work to be of the standard that today’s global UHNWIs expect. These properties offer the best value in Monaco, but the price must be right to take into account the refurbishment costs, effort and time required to bring them up to scratch.

Time is on the side of today’s buyers in Monaco, however, with the average age now 35-55, compared with the 55-60 plus demographic of a decade or so ago. They make the most of the good schools, the growing number of great restaurants and the year-round buzz. As a result, neighbourhoods are changing too, with organic stores, boutique gyms and vegan restaurants cropping up to serve a community who want healthy living with their high life.

Unlike Caribbean tax havens, Monaco has everything they want on tap, so a sacrifice in the size of property is worth it for the location and lifestyle on offer. It is no less convenient for such clients to be domiciled in Monaco than in London – and they can always pop to London for supper, or Vienna for the weekend.

W: Knight Frank

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