SPOTLIGHT 2017 Residential insight New developments Market outlook 180% Resales price growth in the Principality over 10 years 33 Margaret Street 4.3m London W1G 0JD Average resales price +44 (0)20 7499 8644 in Monaco in 2016 Savills_spotlight Monaco_Residential Market_p1_v2.indd 1 20/04/2017 14:32 Savills_spotlight Monaco_Residential Market_p1_v2.indd 2 20/04/2017 14:32 FOREWORD Global hotspot Residential property in Monaco is now the world’s most expensive – however, transaction volumes are falling as the market reaches a sticking point Monaco is home to world-class sporting and entertainment events, successful sports teams Summary and a royal family. With a population of 38,400, it is a big country in miniature. Spoken about in the same Record year breath as the premier world cities, Monaco punches A record 2.7 billion of well above its weight on the global stage. e Principality is a low-tax centre of commerce residential property was with all the characteristics of a leisure destination. transacted in 2016. is makes it very appealing to high-net-worth individuals as a place to live, do business and play. High resales price The average resales price is Prices have adjusted in the now 41,400psm, the highest prime residential markets of in prime markets globally. many cities, yet Monaco’s New build premium have continued to rise There is a signifi cant premium for new build. Sales accounted for 6% At a time when prices have adjusted in the prime of transactions by number, residential markets of many world cities, prices in Monaco have continued to rise. In 2016, average but 17% by value. sales prices reached a record high of €41,400psm, overtaking Hong Kong to become the most expensive Market illiquidity residential real estate in the world. Lack of new supply and is comes as a number of high-pro le new illiquidity in the market developments have completed, although fewer are expected in the near term. Wealthy residents hold may dampen transaction their properties for long periods, so market liquidity volumes in the near term. is low. Monaco’s position on the global stage is assured, but owning a piece of it will be more Long-term planning di cult and come at an ever-higher price. Ambitious urban expansion and renewal projects will Paul Tostevin secure the Principality’s Associate Director +44 (0)20 7016 3883 long-term success. [email protected] savills.com/research 3 Savills_Prime_p03_foreword_v3.4.indd 2 20/04/2017 14:41 Savills_spotlight Monaco_Residential Market_p02-3_v1.3.indd 3 21/04/2017 13:44 RESIDENTIAL MARKET RESIDENTIAL MARKET Market dashboard International Price league Savills World Research Setting new records statistics on Prime and Ultra-Prime values 41,400 Monaco 100,100 39,100 on the global stage Hong Kong Average€4.3 resalem 117,20 0 29,200 Residential property in Monaco is now the world’s most expensive. Large properties are in high Tokyo price in 2016 41,300 demand and trade at a price premium, with the average resale price in 2016 up 180% in a decade London 17,6 0 0 45,200 WORDS PAUL TOSTEVIN 16,700 New York 60,900 record €2.7 billion of residential property and trade at a price premium. One-bedroom properties 15,300 was transacted in 2016. is was the third averaged €36,300psm, compared to €48,500psm for Shanghai 10.9% 25,900 year that total transactions exceeded four-bedroom and larger properties – a 33% premium. Compound €2 billion, with strong demand for limited Monaco attracts a diverse range of international 11,900 A Paris product pushing prices to new highs. buyers seeking security, wealth preservation or a average annual 33,900 Residential property in Monaco is now the most business base. British, Italian, Scandinavian and expensive in the world. e average resale price in 2016 South African buyers were especially active last year. price growth Moscow 11,700 was €4.3 million or €41,400psm, up 180% in a decade Towards the end of 2016 and into 2017, market activity 46,700 – a growth rate largely unseen in other developed slowed as buyers adopt a ‘wait and see’ approach ahead 10,200 since 2006 Singapore economies. By comparison, prime London prices grew of the elections in France (a major trading partner) and 13,900 by 70% over the same period according to our World wider global political events. With prices at record 6,100 Cities data. In common with other prime districts highs, wealthy vendors are unwilling to negotiate Dubai across the globe, large properties are in high demand down and transaction volumes are now falling. 11,100 Key: Prime Ultra prime Monaco outperforms London prime 553 Residential price growth since 2006 in euro terms Transactions 10-year prime price growth Monaco’s impressive in 2016 price growth eclipses other major cities 2016 high Prices reach 45,000 41,400 ve wice Monaco Singapore Paris Moscow tha rim London 180% 75% 32% 26% 2009 dip i ur erms 40,000 Modest price falls in Monaco in wake of GFC, one year after €2.7bn 35,000 London’s similar dip Total of 30,000 residential property 25,000 transacted 20,000 15,000 Dubai -8% Key: Monaco London New York 45% 10,000 (EUR) Prevailing EUR/GBP exchange rates €13.7m London Toyko 70% 5,000 Average new-build 13% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Hong Kong Shanghai sales price in 2016 111% 248% Source Savills World Research and IMSEE Source IMSEE Source Savills World Research 4 savills.com/research savills.com/research 5 Savills_spotlight Monaco_Residential Market_p4-7_V2.indd 4 20/04/2017 14:32 Savills_spotlight Monaco_Residential Market_p4-7_V2.indd 5 21/04/2017 09:51 RESIDENTIAL MARKET RESIDENTIAL MARKET Small supply, high demand Monaco continues to face high demand from the world’s high-net-worth individuals, which is driving price growth and plans for new property development In comparison At just 2 sq km, Monaco Larvotto Average resale price 2016: 6.4m is the world’s second smallest country Palais de la Plage London's Hyde Park 15-storey development La Rousse replacing the oldest building Average resale price 2016: 3.3m in the Larvotto area Testimonio II Le Portier 156-unit residential development for Monégasque nationals This six-hectare land reclamation scheme will add 54,980sqm of Tour Giroflées habitable space, including 10 22-storey tower with 73 residential villas, 115 apartments and retail Monaco units and a fitness centre premises. Completion 2025 New development Tour Odéon In 2016, the average selling price Completed in 2016, this 49 storey, of new-build properties in Monaco 70-unit development contains a was €13.7 million – three times higher five-storey 3,300sqm penthouse than resale properties of a different (sometimes dated) specification. In total, only 553 properties were Monte Carlo sold in 2016. Of these, 33 were Average resale price 2016: 5m new-build – just 6% of the market. However, in terms of value, these La Petite Afrique properties represented 17% of the Les Moneghetti Completed at the end of market. New developments, such Average resale price 2016: 5.6m 2016, the building overlooks as Tour Odéon and La Petite Afrique, Monte Carlo Casino have brought property to Monaco Le Stella gardens and boasts seven that’s up to the standards of other Mixed-use scheme of two villas apartments of 400-700sqm major world cities. Designed to meet and 99 apartments, with retail La Condamine the demands of wealthy international and commercial space Average resale price 2016: 4.3m Sporting d’Hiver occupiers, the well-appointed, Designed by Richard spacious residential units offered Rogers, this redevelopment are priced accordingly. will contain six residential A large proportion of Monaco’s pavilions, plus commercial housing stock was developed in the and cultural space 1960s and 70s, and many of these properties are looking dated and 26 Carré D’or ripe for renewal and refurbishment. Monaco Ville A contemporary mixed-use In the next wave of development, Average resale price 2016: 1.6m development due to be international architects are raising completed in 2018 the design stakes – for example, La Jardin Exotique Petite Afrique, which was designed Average resale price 2016: 2.4m by Brazilian Isay Weinfeld, provides large apartments with ‘flow through’ terraces, while Sporting d’Hiver, a Fontvielle large mixed-use development that’s Average resale price 2016: 5.8m currently under construction on Le Méridien Golden Square, is designed by 14-storey residential and mixed-use British architect Richard Rogers. development completed in 2015 Civic buildings are getting the treatment, too: the new building for the Yacht Club de Monaco is by British firm Foster and Partners. 6 savills.com/research savills.com/research 7 Savills_spotlight Monaco_Residential Market_p4-7_V2.indd 6 20/04/2017 14:32 Savills_spotlight Monaco_Residential Market_p4-7_V2.indd 7 20/04/2017 14:33 ECONOMY MAJOR PROJECTS THE DIVERSE Monaco in 2025 A dynamic city state, Monaco is planning for the future in order to cement its position on the global stage. The next decade will see expansion and land reclaimed from the sea, ambitious urban renewal projects ECONOMY CREATES and interests outside Monaco’s borders. Three projects alone will bring two new marinas, new cultural facilities and public spaces, and more than 100,000sqm of residential and commercial floorspace A STRONG BASE A diverse economy that includes high-quality manufacturing and marine sciences, alongside finance and tourism, has helped Monaco develop a dynamic base Monaco’s economy is performing strongly. Average annual real GDP growth in the five years to 2015 stood at 5.4%, outperforming the wider Eurozone, which grew by just 1.2% per annum over the same period.