House prices in Monaco jumped by more than a quarter over the past five years as the tiny principality continues to attract wealthy buyers from around the world with its low taxes and glamorous lifestyle.
Average prices have increased by 27.8% between 2010 and 2015 due to high demand and limited supply, according to a report being released Thursday by global real estate consultancy Knight Frank. Last year alone, prices rose by around 10%.
“Prices are among the highest in the world, with its super-prime now touching €100,000 ($112,050) per square meter,” said Edward de Mallet Morgan, head of Knight Frank’s Monaco department.
He added that in Monaco, €1 million ($1.12 million) will only buy you 20 square meters, less than in any other city. In Hong Kong, for example, it will buy you 23 square meters, in London 27 square meters and in New York 30 square meters.
However, while inventory is still tight, Monaco’s constrained supply pipeline did improve slightly in 2015 when 195 new apartments housed within three new prime developments—Tour Odéon, Le Meridien and Le Petitie Afrique, entered the market.
They are all being targeted squarely at the billionaire market. At Tour Odéon, for example, a penthouse is up for sale for an estimated €300 million ($336 million), making it one of the most expensive homes for sale in the world.
The next single largest contribution to housing stock will be the construction of Testimonio II, which will provide some 150 apartments when completed in 2021.
These new developments have resulted in a widening gulf between the price of new and resale properties. The average price of a resale property in Monaco, which is home to 12,200 millionaires, stood at €3.5 million ($3.9 million) last year, while the average price of the 38 new-build apartments sold in 2015 was closer to €11.9 million ($13.3 million).
The report also found that Monaco’s buyer profile is shifting. Not only is the age of buyers lower than it was a decade ago, the nationality of buyers can increasingly be defined according to their purchasing power. British, Italians, Swiss and northern European buyers were active in the $10 million ($11.2 million) and under market last year.
Above the €10 million threshold, Russian buyers, previously absent, are house-hunting once more, joined by Middle Eastern and Chinese buyers.
Niccolo Marzocco, of Groupe Marzocco, which is developing Tour Odéon, said: “We are seeing people from Dubai and all over Europe looking to become resident in Monaco partly for the sun, sea and lifestyle, but also for the security. With more police per person in Monaco than any other country, there is reason to feel secure. You are never alone here as Monaco is so densely populated.”
Originally published MANSION GLOBAL by Kathryn Hopkins