Primary residence market in Monaco in 2015.
Since 2010 Monaco has witnessed economic growth, with a parallel increase in its population. Consequently, the Monegasque real estate market has grown significantly, for both primary and secondary residences.
According to the annual report published by the Monegasque Institute of Statistics and Economic Studies (IMSEE), the primary residence sector has shown its best results in 2015.
It is commonly known that the number of primary housing sales is determined by the construction of private residential complexes. The targeted distribution of new homes is also to be taken into account – if construction projects are only focussed on rentals or partial sales, the property lease rates may be quite low.
Last year was marked by a record number of new constructions in the Principality. Major projects, such as Meridian (Le Méridien), Odeon Tower (La Tour Odéon) and Little Africa (La Petite Afrique) directly increased the number of transactions in the primary sector. All in all, these three residential complexes provided 195 new apartments – a record figure for Monaco in the last ten years. A total of 38 apartments were sold in 2015, which is significantly higher compared to the period from 2012 to 2014 and from 2008 to 2011. Moreover, the completion of these projects will make an even bigger difference in 2016.
In recent years, the primary real estate market has faced another phenomenon. The quality of new housing has significantly increased thanks to such projects as the Odeon Tower and Little Africa, providing apartments with a large living area and a luxurious level of service. The sales of five-room apartments account for almost 70% of transactions, showing a clear interest in large and comfortable properties. Such transactions increased the overall sales in 2015 by 31%.
The growth rate in the primary sector is also boosted by the Meridian project, mainly offering two-room apartments. According to the IMSEE, the total sales of primary residences in 2015 totalled a record of 454 million euros.
The construction of three residential complexes in Monaco largely increased the property sales volume. The market has been dominated by two-room (55%) and five-room apartment sales (29%).
Contrary to 2014 with a significant increase of an average price due to exclusive property sales, there has been a slowdown in 2015. Since 2011, the prices increased steadily until 2014, when they tripled as a result of a 12-room triplex sale.
Despite a large number of five-room apartment sales, two-room flats still account for more than 50% of transactions. Average price does not progress, maintaining its previous level of 11.9 million euros.
The IMSEE report does not include the data on the number of transactions in 2009 and 2010. A small number of expensive transactions over this period strongly influenced an average price and therefore cannot be indicative of a general trend.
All in all, 2015 has been very favourable for the primary housing market in the Principality. With the economic crises of 2008 and 2009 tamed, the local property market has been prospering. While the global economy is bouncing back and maintaining a moderate growth rate, the economic indicators in Monaco increased by 7.2% over the last year. The secondary property sector in 2015 has shown a slight decrease compared to the previous year, while still maintaining a consistently high sales rate.