As it does every year, the Monegasque Institute of Statistics and Economic Studies (IMSEE), publishes the figures relating to real estate transactions, and more specifically those concerning the private residential sector as well as its ten-year evolution.
Prices per square metre are calculated according to the method used in Monaco for calculating saleable surface areas, i.e. the bare exterior of the facade walls and the distance between the walls delimiting the common areas of the building. Balconies and loggias are counted at 100% and roof terraces and gardens at 50%. It should be noted that for some transactions, the surface area is not always known.
Introduction
On 26 April 2022, we concluded that we were confident in the vitality of the Monegasque property market, which should continue to perform thanks to the renewal and modernisation of the property stock and the Principality’s attractiveness in relation to other European countries, in a gloomy and burdensome context, both socially and fiscally. Nevertheless, we were expecting a calm in the second half of the year, driven on the one hand by the impact of the Russian-Ukrainian conflict on the residents in Monac with economic links to these countries, and on the other by the rise in interest rates and galloping inflation, as well as possible changes in legislation concerning the profession of property trader.
After a slowdown in 2020 and 2021, against the backdrop of the health crisis, the Monegasque property market is set to rebound again, confirming its upward trend. In terms of volume, it is up by 18.2% on 2021, with 520 transactions, and in terms of value, it has set a record with a cumulative value of €3.54 billion, representing an increase of almost 51.8%.
This growth was driven primarily by the performance of the new-build property market, which quadrupled in volume and quintupled in value, with 88 flats sold for a total of €1.19 billion. Growth in this market is directly linked to the property development programmes currently under way and the resulting deliveries.
The resales property market is also growing in terms of volume (+12.1% compared with 2021), with a cumulative value of €2.32 billion. However, the average price per square metre remains stable, admittedly above €50,000 (€50,982 to be exact) but down slightly (-1.8%) compared with 2021.
The results have not been linear over 2022 as a whole. The sales market gained strength over the quarters, while the resale market got off to a very good start, only to slow down at the end of the year. Indeed, in terms of sales, performance systematically exceeded that recorded in 2021, with exceptional results in the 2nd and 3rd quarters, during which 76 transactions were completed (compared with 11 in 2021), resulting in cumulative sales of almost €1 billion in 2022 compared with less than €100 million for the equivalent period in 2021. In the first two quarters, the number of resales was similar to the previous year (223 vs. 214), but the cumulative value of resales rose to €1.2 billion (+45.8% vs. 2021).
In the 3rd and 4th quarters, the number of resales continued to follow the results of 2021 (209 vs 203). However, the total amount of resales fell significantly compared with the previous year, from almost €1.3 billion in 2021 to €1.15 billion this year.
The Monegasque residential property market
Evolution of the cumulated amount and numbre of property transactions
In 2022, 88 sales and 432 resales were recorded, giving a cumulative total of 520 transactions. This represents an increase of 18.1% compared to 2021, but still below than what have been observed en in 2014-15-16, with 566 transactions recorded at their peak. In terms of cumulative value, the total reached an all-time high of €3.54 billion, a spectacular rise of 51.8%.
This increase is mainly due to the number of sales, which has quadrupled in volume from 23 units in 2021 to 88 in 2022 and quintupled in value to €1.19 billion (a total of 146 deliveries in the open market in 2022).
A/ The property sales market
Ten-year delivery of new flats in the private sector
The delivery of new flats has increased considerably compared to 2021, with a total of 146 units, representing an increase of 62%. While the “Villa Portofino” and “Villa Farniente” represent just 12 units, the “45G” and “L’Exotique” residences account for 134 flats. Stella» and «Tour Odéon» are the only two buildings to have delivered more units in a decade. With the exception of the “Tour Odéon” in 2015 and 1993, this is the highest number of new flats delivered since 1992.
The good results for the new development market are also benefiting from the sale off-plan of a large number of flats available on the many building sites currently under construction in the Principality.
Ten-year evolution of the number of sales by type of flat
In 2022, the distribution of flats by type was relatively uniform, with the exception of 1-bedroom, which accounted for just 8% of sales. In addition to the 23 studio apartments sold, which remain the most common type of apartment sold in Monaco and the most favoured by property investors, we can see that family flats are gaining ground (from 2-bedroom apartments), accounting for almost 66% of the total number of new flats sold.
Ten-year evolution in the amount of sales by type of flat
For the first time, the sales market have broken the symbolic billion euro barrier (€1.19 billion), which is 4 times more than the total for 2021! The previous records were set in 2015 and 2016, when sales totalled €453 million, just 38% of the new figure.
This is due to a combination of factors, as described above: the large number of new flats sold and their broad typology, not to mention the very high price per square metre. This trend is set to gather pace, particularly with the Mareterra development, which should make a major contribution to setting a new record when it is completed in 2025.
Ten-year evolution of average and median prices
In the space of a decade, the average price has risen by almost 45%, while the median price dropped by 6.8%.
In 2022, the average sales price is €13.5 million, while the median price is €5.6 million.
Compared with the evolution of recent years, there is no clear trend. This is generally due to the fact that statistical data is limited and therefore difficult to use (only a few dozen transactions are observed each year), but also to the fact that the prices of units sold are the direct result of ongoing property developments and the direction chosen by developers, whether in terms of typology or standard.
B/ The property resales market
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Global market
Ten-year evolution of the number of resales by type of flat
There was a 3.6% increase in the number of resales compared with 2021, with a total of 432 transactions recorded, exceeding the level observed in 2019, before COVID, but without reaching the results recorded from 2014 to 2016, with more than 500 resales.
The breakdown of resales by type of flat sold in 2022 is fairly similar to that observed in 2021, with the exception of transactions involving 2-bedroom apartments, which rose by 18.4%, representing 16 more units.
As in the sales market, 1-bedroom flats are the only type to have fallen. Studios and 1-bedroom apartments accounted for 232 resales, i.e more or less 54% of the flat types sold, as in 2020 and 2021.
Ten-year evolution of the amount of resales by type of flat
The cumulative value of resales once again exceeds €2 billion and continues to grow, rising by 12% compared with 2021 to reach €2.35 billion. This is close to the peak recorded in 2019 (-5%).
With the exception of 4-bedroom properties, which are down slightly by €33.4 million compared with 2021, all other types have seen their overall volume increase. Although villas accounted for only 9 transactions, compared with 7 in 2021, their total value more than doubled (+115%).
Ten-year evolution of average resale prices by flat type
In 2022, only the 2-bedroom and 4-bedroom plus flats will record a fall in their average price compared with 2021, of which 10.2% for 3-bedroom flats, even though this is the type that has seen the strongest increase in the number of resales. On the other hand, 1-bedroom and 3-bedroom apartments have seen the biggest increase in their average price, up by 15%. Villas broke all records, with a 67.6% increase in their average price to reach an average of €25.83 million. As the analysis of villas is based on just 9 transactions, it is difficult to draw any conclusions. However, we can assume that as villas become rarer and rarer, their price will naturally rise, and that some of them will be able to be demolished to make way for ambitious new developments, thus fetching high prices.
Ten-year evolution in the number of flat resales by year and price bracket
The price bracket that saw the biggest changes between 2021 and 2022 involved transactions worth more than €10 million, with 16 more resales, representing an increase of 51.6%. In proportional terms, this segment has continued to grow in importance since 2019, accounting for almost 30% of the total number of resales this year, compared with 22.5% in 2021, 18.5% in 2020 and 18.8% in 2019. The number of transactions under €10 million has stabilised, with only 3 more properties sold than in 2021.
Ten-year evolution of average and median resale prices
The average price will rise slightly for the 3rd year running, from €5 million to €5.4 million in 2022 (+8.2% vs 2021). The same applies to the median price, which rises from €3.2 million to €3.3 million (+6% vs 2021). This is still below the level reached in 2019. In 10 years, the average and median prices have risen by 80%!
Ten-year evolution of the price per square meter by type of flat
The price per square metre will have fallen by almost 2% compared with 2021, but remains above the symbolic €50,000 mark for the 2nd year running, with an average price of €50,982! The average price of all types of property has fallen, with the exception of 1-bedroom and 3-bedroom flats, which are breaking all-time records at €52,661/sqm and €53,359/sqm respectively. It is the 4-bedroom plus flats that are recording the sharpest fall (-8.5% vs. 2021), stabilising at a price similar to 2018. Prices for studios and 3-bedroom apartments are close to 2018/2019 levels.
Ten-year evolution in the average price per sqm and the cumulative property resales amount
In a decade, the average price per square metre has risen by 60.5%. It is interesting to note that prices have been rising in stages every two years, with the exception of 2018, 2019 and 2020, when an exogenous factor (global pandemic linked to COVID 19) caused prices to stagnate for three years. We will see if this pattern continues in 2023, with a further rise in prices per square metre. In a decade, the average price per square metre.
In terms of the cumulative value of resales, we are seeing greater volatility. The 2 billion threshold now seems secure, since with the exception of 2020, when it was very slightly lower, it has been systematically exceeded since 2018. The record is still set in 2019, with cumulative resales totalling €2.475 billion.
2. Per district
Number and surface area of buildings per district on 31 December 2022
Housing, including public housing, accounts for 61% of the surface area built in the Principality. Nearly 43% of the surface area built for residential use is located in the districts of Monte-Carlo (24.1%) and La Rousse (18.8%).
Number of homes per district in 2022
State-owned housing reserved for Monegasque, as well as that of the Caisse Autonome des Retraites for certain categories of the population, are excluded from the analyses as they cannot be the subject of a transaction (only of a so-called housing-capitalisation contract between the State and the occupants in the case of state-owned housing). Most of these flats are located in Fontvieille, Moneghetti, Jardin Exotique and Condamine.
Monte-Carlo and La Rousse account for a total of 8,340 private homes, representing more than 51% of all residential properties.
Percentage of private homes sold by district
Fontvieille was once again the district with the highest turnover in 2022, with 3.5% of private homes sold. The residential areas of Monte Carlo and La Rousse, highly sought-after by property dealers and investors, follow close behind. Larvotto, on the other hand, is the district with the least turnover, due to the fact that the majority of its properties are owned by large families.
It is interesting to note that the Monaco-Ville district has seen a real boom in 2022, with 3% of private homes sold, compared with 1.7% in 2021. Conversely, the Jardin exotique district has seen less of a boom, with the percentage of private homes sold falling from 2.4% to 1.3%. Over the years, we have seen that the areas with the highest turnover are systematically Monte-Carlo, La Rousse and Fontvieille.
Ten-year evolution in the number of property resales by district
Unsurprisingly, the Monte-Carlo district is the one that has once again recorded the highest number of resales, with an increase of 17% (158 vs 135 in 2021). The same applies to La Rousse-Saint Roman, which recorded an 18% increase (118 resales vs. 100 in 2021).
Fontvieille, which has been in vogue for a number of years, has stabilised its popularity, with only one additional transaction recorded (44 vs. 43 in 2021). La Condamine, which reported the strongest growth in 2021 (+71.4% compared with 2020), has seen a sharp drop this year (-25%). As for Jardin Exotique, the number of transactions continues to fall, becoming the lowest in 10 years.
Monaco-Ville, on the other hand, has seen the strongest increase (+77%), almost doubling its number of resales after 3 very slow years.
Ten-year evolution of the price per square metre by district
In some districts, the number of transactions for which the surface area is known is too low to be calculated.
Monte Carlo is down by 8.2% compared with 2021, reaching €55,054/sqm, and has lost its position as the most expensive district per square metre. Le Larvotto regains 1st place with a slight rise of 4.4% to €62,351 per square metre; however, this result is based on a very low number of transactions (5 properties sold). Fontvieille, which had recorded strong growth in 2021 (+13.4% vs. 2020), fell by 6.1% to €55,279/sqm, and is now back in second place, demonstrating that it remains a highly sought-after area for its lifestyle and amenities.
Jardin Exotique remains the least expensive district in the Principality, with an average price of €34,832/sqm. It has seen a variation of just 39% in 10 years, compared with the average price per square metre in Monaco, which has risen by 60% since 2013.
The Moneghetti district recorded the biggest increase (+11.6%) compared to last year.
The gap between the most affordable district in terms of price per square metre and the most expensive continues to widen. There is a gap of €27,519 in 2022 compared with €24,239 in 2021, i.e. a proportional difference of 79% compared with 68% last year.
Conclusion
The Monegasque property market remains very strong, both in terms of units sold and cumulative amounts, with exceptional results for the new-build sector. Nevertheless, the average price per square metre, after rebounding sharply from Covid between 2020 and 2021, declined slightly in 2022.
As of the 1st quarter of 2023, the new-build market appears to be continuing along the same lines as at the end of 2022, and performed well, with 12 sales recorded (i.e. twice as many as over the same period in 2022), totalling transactions worth 400 million euros. The resale market remained stable in terms of the number of units sold, with 96 transactions (+3.2% vs. 2021), but increased in value by 12.4% to 563 million euros in cumulative sales.
The new-build market should still be fairly buoyant in 2023, given the projects currently underway, but in the medium term, once the Bay House and Mareterra projects have been completed, no major private residential developments are expected for the time being.
In the resale property market, the number of transactions is likely to remain broadly unchanged, as supply remains limited and demand persists, even if it appears to be falling slightly. After stabilising in 2022, the average price per square metre is expected to rise slightly.
On the one hand, property dealers who have sustained the market in recent years are much more cautious about investing because of financing costs, and those who bought 2 or 3 years ago still haven’t managed to sell their properties. Moreover, we will be closely monitoring the legislative changes relating to this profession, scheduled for the end of 2022 but have not taken place, and which are aimed as much at professionalising the players and making them more accountable as at taxing them.
On the other hand, bank financing has become more complex, with much stricter debt ratios imposed by financial institutions, depriving a number of borrowers of access to credit. A usury rate that is relatively low compared with the financing costs of lending institutions reduces their appetite for the real estate sector, and interest rates that are logically very high generate very high additional costs and reduce opportunities, particularly for first-time buyers.
The financial profile of buyers in Monaco is quite different from that in other countries around the world, and should make the property market more resilient. Customers often have substantial liquidity, enabling them to buy in cash or with Lombard loans, which remain attractive and to consider today thanks to a bond and money market that still yields more than the cost of interest rates. Mortgages, on the other hand, are much more affected.
The very modest rental yield offered by the Monegasque residential market (between 1.5% and 2% per year), despite the increase in property value over the medium to long term (prices have risen by 61% over the last 10 years), makes investors hesitant when they have the opportunity to make low-risk financial investments that generate a better return in the short term.
As a result, we are seeing a return to a balance in negotiations between sellers and buyers (particularly those paying cash), whereas the balance of power in transactions over the past two years has been predominantly in favour of sellers.
However, we will end on a positive note. The very high inflation observed in 2022 in the eurozone (annual rate of +9.2% according to Eurostat) has begun to ease gradually (annual rate of +6.1% in May 2023). A fall in bank interest rates is expected at the end of the year, which should help to revive the property financing market.
The rental market has also been very attractive for several months now, and available properties are generally let in less than a month, with many people applying to relocate to Monaco. These new residents, if they enjoy living in the Principality, should become potential buyers in the medium term.
The whole team and I are at your disposal, both in our Monegasque agency and in our French agency, to help you with all your property projects in the Principality of Monaco and the surrounding area.