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Monaco Tops European Property Poll
Another property survey, and again it shows Monaco real estate as the most expensive in Europe.
What is likely to happen to prices in the tax haven in the next year or two?
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A recent survey of global property prices has reinforced Monaco as having the highest prices in Europe, beating off London and Paris, but in recessionary times will prices come down in the well known tax haven in the next year or two?
The prices have certainly peaked, back in 2008, but this is true of nearly everywhere else, and it is in only certain areas of a major city or small country like Monaco that prices have risen due to local circumstances, for example a lot of overseas buyers in London looking specifically for Kensington, Regents Park, Mayfair and Hyde Park.
Monaco has maintained her high real estate prices due to her tax haven status, and attracts the super-rich in much the same way London does, except there is less available property for sale in Monaco than there is in London - and there's no sign at the moment of supply becoming easier in Monaco.
There are some new developments on the drawing board, and some due to start construction soon, but the answer a few years ago was to build an isand that would house a university, office and residential buildings, but this was put to one side as the world's economy ran into difficulties, so the new supply of Monaco property that was hoped for won't be materialising anytime soon.
So with little new supply becoming available, will demand be good in the short term?
There are plenty of multi millionaires who like the lifestyle and security that Monaco offers them - there is a policeman for every hundred residents - and there isn't any sign that the wealthy won't be able to keep or extend their wealth in the next twelve to twenty four months, recession or no recession.
And taxes for businesses and individuals will be rising in the next two years. They're already at quite high levels, and for many who are selling their businesses it makes financial sense to move to a tax haven - and Monaco does appeal to them.
Much of the appeal lies in the lifestyle they can now afford. Along with the Monaco Grand Prix there is the annual yacht show - the only one in the world for superyachts - and also some of the best hotels in the world. The Hotel de Paris is just one of the Monaco hotels recognised as among the best.
The alternative tax haven with the same benefits is Andorra, and Monaco has the advantage of a heliport with Nice International Airport ten minutes away, or forty minutes by road, while for those contemplating an Andorra property it's two and a half hours to Barcelona or Toulouse airports. But Andorra property is a quarter of the price of Monaco's so there is an alternative available in Europe for people who want a tax haven.
Currently prices start at over a million Euros for a studio apartment. One of the lowest priced ones is in a well known building called Annonciade and has 38m2 of living space with an 8m2 terrace and needs updating - 1,290,000 Euros. For two bedrooms and two bathrooms there is one in Jardin Exotique at 2,400,000 Euros. It's in good decorative order, 85m2 of living space and a 15m2 terrace, and has Mediterranean views.
The answer to whether property prices in Monaco are sustainable is that prices are likely to stay high, and maybe the highest in Europe, but it will take London and other sought after cities to see their real estate prices fall before there is pressure on owners to lower their prices.
And it will also depend on just how deep and long the current recession is, and whether it affects the wealthier echelons of society.
Send an email to Roger Munns of Tribune
44 1483 870340
Keywords:
property
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