Spotlight Monaco Residential Market 2015

Savills World Research Monaco Residential Spotlight Monaco Residential Market 2015 savills.com/research 2015 Spotlight Monaco Residential Market 2014 was a record year for Monaco's residential markets. A weak euro offers buyer opportunities. EXECUTIVE SUmmARY elcome to our unique position as a hybrid centre second in- that incorporates not only commerce depth look at and ultra-wealth in a low-tax the residential jurisdiction but also a Mediterranean Prices are stable and Monaco remains property playground for the world’s wealthy. one of the world’s most expensive real Wmarket in Monaco. In this report estate markets. However, in US dollar we show how market activity and Aside from the clear parallels pricing is at an all-time high while with other world centres, Monaco terms the Principality has slipped to extraordinarily constrained land is a premier destination for gambling, second place behind Hong Kong, due supply means newly built property motor sport, yachting, recreation and to a weak euro. See page 5 is extremely rare and at a premium relaxation. This combination, right on so only the ultra prime market and Europe’s doorstep, sets it apart from the world’s wealthiest are now almost any other city or state. Only catered for in the Principality. Macau, on the doorstep of China is beginning to come close but the Monaco has the highest GDP per attractions of the South China Sea are For the global super rich, Monaco head of any population in the world. not the same as the Mediterranean. operates as part of a network of city It is one of a handful of global elite In the longer term, Gibraltar has the city-states and, in this respect, has potential perhaps to be a regional property holdings. Homes in Monaco more in common with Macau and rival but will need huge amounts are most commonly paired with London, Singapore than almost anywhere of investment and infrastructure to else in Europe. Monaco’s wealth and approach Monaco’s prestige. followed by New York and Moscow. status, nevertheless, goes hand in See page 5 hand with some of the world’s major The unique offering of Monaco’s urban centres where many Monaco global appeal and its extremely residents will also spend some of limited land supply will all combine their time. The lives of the ultra-rich to keep Monaco’s real estate prices in London, New York and Moscow high with few or no mechanisms are often intertwined with Monaco. for them to fall. We anticipate they 2014 was a record year for the Monaco are at, or near, a high plateau, in To classify Monaco solely as another common with many other ultra prime residential market. The number of world-class urban conurbation markets globally and will be for some residential sales exceeded their 2007 misses the point. It occupies a time to come. n peak for the first time in 2014, with a combined value of €2.4bn. See page 6 New build development is characterised by well appointed schemes offering large units to appeal to the world’s wealthy. Notes about the publication Developers are aligning products with This document was published in May 2015. The data used in those offered in the major world cities. the charts and tables is the latest available at the time of going See page 8 to press. Sources are included for all the charts. savills.com/research 03 Spotlight | Monaco Residential Market 2015 MONACO AT FIGURE 1 FIGURE 2 Monaco fact file Super commuters: the top city pairs where UHNWI hold homes A GLANCE Monaco is governed under a constitutional A sovereign monarchy, of which the Sovereign Prince of Monaco city-state Monaco is the second smallest – Albert II – is head of state. independent state in the world, and home to the world’s highest The Principality is home to residents from over 100 concentration of ultra wealthy Global nations. French is the official language of Monaco, individuals. A global hotspot with a hotspot but Monégasque, Italian, and importantly, English are widely spoken. distinctly Mediterranean character, LONDON Monaco offers its residents a Just 2.2km in area, Monaco is 6% the size of MOSCOW cosmopolitan city environment Manhattan but home to the world’s highest NEW YORK Supply LOS ANGELES in a low tax, business friendly concentration of wealthy and super-wealthy constrained jurisdiction. A busy annual calendar individuals. Prime property is in high demand with BEIJING MONACO of high profile events ranging from price tags to match. SHENZHEN DELHI the Monaco Grand Prix to the Tennis HONG KONG Masters keeps the global gaze Sitting outside the EU, Monaco does not levy MIAMI Low tax firmly on the tiny Principality, and income tax, wealth tax or capital gains taxes. MUMBAI ensures it punches well above its weight on the global stage. SINGAPORE Financial Monaco ranks 6th in the Y/Zen European Global centre Financial Centres Index. JAKARTA The Monaco Grand Prix and Monte Carlo Rally are Motor sport widely considered to be the most prestigious events “Monaco's low taxes and in the motorsports calendar. SYDNEY The iconic Monte Carlo Casino is integral to Monaco’s appealing living environment Monte Carlo economy, tourist industry and global profile. It Casino have made it a centre of incorporates an opera house and ballet company. global wealth” Source: Savills World Research Source: Savills World Research, Wealth X FIGURE 3 Economy and employees, and VAT payable on the key world cities and centres of Moscow are also frequently paired Monaco enjoys a buoyant and goods and services, to raise income. Europe and North America. with Monaco, in smaller volume. It is Ultra-prime prices: per square foot/metre diversified local economy. GDP Corporations are exempt from tax, no surprise that the neighbouring Nice surpassed pre-crisis levels as early as except where more than 25% of We have observed that real estate airport is one of the most important 2014 price movement 2012, and the economy has performed turnover is generated outside Monaco, investment among the world’s super- bases for private jet traffic. City USD psft Euro psm well since, driven by wage growth and in which case a rate of 33.33% applies. rich – particularly among emerging in local expansion in the economy generally – wealth – is overwhelmingly an urban Monaco’s status as a must-have currency notably real estate. Centre of global wealth phenomenon. Just under half of global address has pushed prices to Hong Kong $10,700 € 92,500 Monaco’s low taxes and appealing UHNWI investment has flowed into the global highs (Figure 3). The price of Finance remains the city-state’s major living environment have made it a long- major cities of the world. An important ultra-prime property in Monaco stands industry, accounting for 16.7% of standing centre for the global super- urban centre in its own right, Monaco at €90,900 psm ($9,000 psft). While Monaco $9,000 € 90,900 GDP. Monaco ranks 6th in the Y/Zen rich. One reason it bounced back so benefited from this flow of capital in prices were static in 2014, a weak European Global Financial Centres rapidly from the global financial crisis the years immediately following the euro has seen it drop down the global New York $6,100 € 52,700 Index, having leapfrogged Vienna was due to a weight of international global financial crisis. league table and is now second to since last year’s poll. Other important capital seeking safe-haven investment Hong Kong in US dollar terms, purely London $5,900 € 51,300 sectors include sciences (including in the Principality’s real estate. For the global super rich, Monaco on currency movements. Monaco biometrics), tourism and public operates as part of a network of city looks increasingly affordable to US Tokyo $5,900 € 51,300 services and administration. The number of global UHNWI property holdings. Figure 2 above dollar, British pound and Swiss Franc individuals (those with assets of at shows the top city pairs where UHNWI buyers (see p8). n Monaco is an important centre of least US$30m) exceeded 211,000 in hold homes and divide the majority Paris $4,400 € 38,400 employment in the region, and a net 2014, with a combined wealth of $29.7 of their time. While London is at the importer of labour, with more than billion. Their numbers are forecast nexus of these city hubs, it is one of Moscow $4,500 € 38,600 50,000 jobs to its 36,950 inhabitants. to pass 250,000 by 2019, with a a dozen globally important locations. Employment grew by 3.8% in 2014. combined wealth of $40bn, according Monaco, is one of these important Singapore $2,500 € 23,100 Unsurprisingly, the unemployment rate to Wealth X. Asia, Africa and the centres, in league with major world 29% Almost one in three of is close to zero. Middle East are set to see the fastest centres for this group. Shanghai $2,400 € 20,800 growth in their wealthy populations. Monaco’s residents are The Principality does not levy any For homeowners the London-Monaco Dubai $1,200 € 10,600 income tax, wealth tax or capital This is important for Monaco as link is especially strong, the major classified as millionaires gains tax. Instead, it uses social new wealth created in emerging world city complementing the Source: WealthInsight insurance, payable by both employers economies seeks safe havens in low-tax Principality. New York and Source: Savills World Research 04 savills.com/research 05 Spotlight | Monaco Residential Market 2015 RESIDENTIAL Investors have been active in the FIGURE 5 €1-10m bracket, seeking easy to Monaco district by district Seven key districts with distinct residential characteristics MARKET manage properties to feed into the rental market.

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