Enjoying a significant surge in residential sales during 2014 totalling USD2.7 billion in 2014, according to a recent Savills report, Monaco’s real estate sector is on the up-and-up with re-sale transaction volumes last year gaining a huge 21 percent above their previous peak in 2007.
The re-sale market was the biggest winner with 555 properties sold, according to the World Property Journal, whilst new developments totalled sales volumes at EUR345 million (USD376 million), which is 2.5 times the volume recorded in 2013.
The combined value of re-sale and new properties sold last year totalled EUR2.4 billion (USD2.7 billion).
According to reports, transaction volume was the main driver behind Monaco’s record-breaking 2014 as prices remained relatively static due to the weak state of the euro at the moment against the US dollar.
Prices should remain static throughout 2015 also due to the short supply in the principality; the pipeline of new development will see new units only enter the market in a few years’ time, according to Forbes Life.
Re-sales dominate the Monaco market due to the new development sector being comparatively tiny and incredibly exclusive, the World Property Journal reported. New developers tend to focus on the global ultra-prime segment where they construct larger units at high prices. According to Forbes Life, the ultra-prime properties on the market attract a selling price averaging at EUR90,900 (USD100,000) per square metre.
One example of an exclusive new Monaco development is Tour Odéon, completed earlier this year. The residential skyscraper boasted the world’s most expensive penthouse inside, exclusively catering to the global elite.
Monaco remains such a draw for the world’s wealthy for its extremely lenient tax rules for residents – they pay no income, capital gains or wealth tax, according to Forbes Life. The principality is also a hub for motor sports, gambling and yachting. As World Property Journal asserts, only Macau comes close in this regard although the South China Sea doesn’t have quite the same appeal as the Mediterranean riviera.
“The unique offering of Monaco’s global appeal and its extremely limited land supply will all combine to keep its real estate prices high with few or no mechanisms for them to fall,” said Paul Tastevin, associate director of Savills World Research.
“Prices are at, or near, a high plateau and will be for some time to come,” he added, hinting that the European tax haven’s popularity among the world’s super-rich would further grow in popularity.