Prime residential

Monaco is the most expensive prime residential market in the world. Average prime residential values in the Principality are 10% higher than Hong Kong, 96% higher than New York, 176% higher than London and 237% higher than Paris.

While price growth is slowing across the world’s leading prime city housing markets, with an average growth of 2.3% over 2018, Monaco’s average price per sq m increased by 18.1% during the same period.

Comparative costs of owning residential property

For foreign buyers, the costs associated with buying, holding and selling a residential property in Monaco are consistent with the major cities across the world. Stamp duty is generally charged at 4.5%. The only other costs associated with property purchases relate to agency costs in sales and acquisitions.

Despite there being no occupancy tax in Monaco, the total cost of buying a US$2 million property, holding it for five years and selling it for the same price is US$280,000, equivalent to 14% of the property price. This is mainly due to agency fees to buy and sell the property.

Residential rents

Monaco is the most expensive market to rent prime property (below). Despite a number of new apartments being added to the rental market in recent years, demand is still high, driven by new arrivals to the Principality. Owning or renting a property in Monaco is one of the conditions of obtaining residency, and renting is an opportunity to test the lifestyle before making a longer-term commitment.

In the first quarter of 2019, average asking rents per month were €101 per sq m, ranging from €90 per sq m for a studio or one-bedroom property, to €113 per sq m for properties with four or more bedrooms. The premium for larger properties is partly due to the rules of applying for residency: the property must be appropriate to the size of the household.

The most desirable rental properties in Monaco are located in the traditional quarter of Monte-Carlo. Demand is also high in La Condamine from families wanting to be close to the International School of Monaco before deciding where to buy.

OFFICE MARKETS

Demand for office space in Monaco remains strong. The Principality has a diverse and forward-looking economy and attracts a wide range of professional services occupiers. There are 55,427 employees, an increase of 4% since 2017, compared with a population of just 38,800.

In line with other global business centres, start-ups and tech are a key focus. New businesses in Monaco are exempt from corporate income tax for two years. Additionally, a start-up programme, MonacoTech, was created in September 2017, and, within a year, 230 applications had been received from 30 different countries.

Office space is concentrated in Carré d’Or, which is considered Monaco’s central business district. The average prime office rent across Monaco was €1,350 per sq m per annum in the first quarter of 2019.

However, individual rents can be significantly higher. For example, the asking rent for offices on the ground floor of the prestigious ‘Le Prince de Galles’ residence, which is expected to be available by July 2019, is around €2,900 per sq m per annum.

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