Now is an opportune time for those looking to invest in one of the world’s most expensive real estate markets.
The Real Estate Observatory report, published annually by the Monegasque Institute of Statistics and Economic Studies, reported that Monaco’s property prices dipped for the second consecutive year in 2020 following more than a decade of historic growth.
According to the report, Monaco’s average per square meter price hovered at around 47,619 Euros in 2020, compared to a record high of 48,799 Euros in 2018.
Monaco’s real estate market is typically seen as one of the world’s priciest, thanks to high demand and limited supply. Record price increases over the past 15 years have proved that Monaco real estate investments offer healthy returns.
“With prices down for the second consecutive year there has never been a better time to invest in Monaco real estate,” Benoît Martin, commercial director and negotiator at La Costa Properties Monaco – a leading real estate agency – said. “There is no doubt that prices will start to rise in the coming months, thanks to the influx of investors from outside Europe as COVID restrictions are gradually eased.”
An opportune time to invest
The report tracked real estate prices from 2006, when property cost an average of 14,784 Euros per square metre. According to the report, by 2011, prices had more than doubled, with an average recorded price of 31,260 Euros per square metre.
During the past 15 years, slight price dips have offered property investors opportune times to make a savvy Monaco real estate investment; in 2009, 2012, 2015, 2019 and 2020. The most recent drop in prices (a -1.3 percent drop in 2019 and a further -1.1 percent drop in 2020) follow on from strong growth in 2018, with prices rising by more than 18 percent.
“The Monegasque economy, like the global economy, continues to feel the impact of a health situation that remains precarious and uncertain,” the report noted. “Despite a summer period that enabled activity to resume to a significant extent and the recovery of most economic indicators, annual figures are down, adversely hit by performance in the second quarter.”
Monaco real estate prices more than double in a decade
While Monaco’s real estate investments may have been impacted by the global health crisis, when you look at Monaco’s historical property prices, a dip in property prices rarely lasts long.
The overall trajectory during the past 15 years has been one of significant growth. In the past decade, the average per square metre price for Monaco real estate has increased by a robust 52 percent, the report stated.
The report also noted that in addition to a consecutive two-year drop in the average real estate price per square metre, the cumulative value of transactions has also declined by some 22 percent, going back to the same level seen in 2017.
The government report also examined the number of sales by property type over the past decade, with 2020 showing a notable decline in the number of studios and 2-room apartments. However, 2020 showed an increase in the sale of 3-room apartments, up by 18.8 percent compared to 2019.
Which district is best for a Monaco real estate investment?
Choosing which district to make a Monaco real estate investment is just as important as choosing which property to invest in.
The Monaco government report looked at the mean price per square metre of real estate by district in 2020.
Larvotto, one of Monaco’s most sought-after districts, reported the highest average per-square metre cost in 2020, at 65,000 Euros per square metre.
On the other end of the scale, Les Moneghetti offered the most competitively priced Monaco real estate investment in 2020, having seen the most significant drop, down -15.8 percent to 38,258 Euro per square metre average.
The district of La Condamine saw prices drop below 50,000 Euros per square metre for the first time since 2017 to 47,412 Euros, while Monte-Carlo and Fontvieille saw prices inch just above the 50,000 Euros per square metre mark in 2020.
Ongoing demand for Monaco real estate
As one of the world’s most sought-after destinations, demand for Monaco real estate remains high.
According to the report, continued development has seen more than 487 new apartments delivered, including 26 in 2020, offering a refined selection of Monaco real estate investments. New luxury developments include Le Stella, Tour Odeon, One Monte-Carlo, and Palais de la Plage, to name just a few. This trend is set to continue, with new luxury developments set for completion in 2021 and beyond.
Monaco real estate not only offers a strong return on investment but also offers investors the opportunity to benefit from everything that the city-state offers.
Amongst the principality’s many benefits are a favourable tax system, political and economic stability, excellent healthcare and education systems, a convenient geographical location along the heart of the French Riviera, and lavish offerings, including world-class events and award-winning restaurants.
Once the global pandemic eases, there is no doubt that property prices will begin to rise once more in Monaco. Savvy investors would therefore be wise to make a Monaco real estate investment now, before prices rise once again.
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