14/03/23

EUROPE: Monaco Home Price Rose 10% in 2022 as Demand Outweighed Supply.

As published on barrons.com, Tuesday 14 March, 2023.

The ultra-expensive microstate of Monaco—a global tax haven—had a banner year in 2022, and a lack of supply means that is set to continue, according to a report Monday from Savills.

In the sovereign city-state on the French Riviera, which is just under 500 acres, the total value of transactions was €3.5 billion (US$3.75 billion) last year, eclipsing the previous record, set in 2019, by about €750 million, the report said.

Meanwhile, transactions were up 10% compared to volumes experienced in the last five years, the data showed. In addition, total sales of apartments with three bedrooms or more increased by over €830 million annually in 2022 and accounted for more than 80% of units sold in new buildings.

“The Principality of Monaco has long been a favored destination of the world’s wealthiest,” Irene Luke, principal partner at Savills Monaco, said in the report. “Since 2010, the total volume of transactions has increased by over 500%, and the number of sales has grown by 130%.”

Monaco has the highest price per square meter of any global city, €50,982 per square meter, as well as the most expensive monthly rent, at €110 per square meter, the figures showed.

Although new developments are on the rise—146 units were delivered in 2022, the third highest number behind 1993 and 2015—demand still outstrips supply.

“It is likely that 2023 will see similar levels of sales and pricing to 2022,” Ms. Luke said, adding that the majority of buyers in Monaco pay in cash, so “the role of interest rates will likely have less of an impact on sales volumes than in other locations.”

Indeed, domestic purchases are the backbone of the real estate market there, and the agency expects “sales volumes to remain strong with stable prices.”

Monaco is considered a tax haven because it has no property or capital gains taxes, and does not tax personal income.