“Property sales are booming but the endless construction is changing the character of the low-tax city-state.” – reports the Financial Times
Thirty years ago, John (not his real name), a “retired international ad-man” originally from the UK, moved to Monaco with his wife. The housing market of the elite low-tax principality on France’s south coast was in the doldrums and the couple rented a 350 sq m apartment on Avenue Princesse Grace — the waterfront boulevard named after Grace Kelly, which today is one of the most expensive streets in the world. Back then, his apartment cost about $5,000 per month. “Ground floor. Small garden. Three steps to a huge pool. The owner wanted to sell me the unit for $6m and I told him he was nuts.”
Today, the unit is worth “between $30m and $40m”, and John and his wife have moved to the Cayman Islands.
“[The rent increases] were becoming absurd — my wife simply could not stand the waste. And under Monegasque law, renters have almost no rights. No matter what you restored or rebuilt you were obliged to return the unit to exactly as you found it which means that in most cases you lost your three-month deposit,” he says.
The changing character of Monaco was also grating for John and his friends (“six other families followed us out of Monaco for Cayman”). Endless construction was turning Monte Carlo, the central district housing the belle époque casino and opera house, into a noisy building site, he says. On Avenue Princesse Grace, Agence des Ambassadeurs is selling a three-bedroom apartment for €21.9m. In Monte Carlo, Prestige Property Group is selling a four-bedroom apartment for €18.9m.
“Today there is construction everywhere making it difficult to drive around,” says Lee (also not his real name), another resident. “Parking is a mission impossible: most buildings don’t have their own garage and if you want to rent spots with the government, there are huge waiting lists.” Lee arrived in 2005 with his wife and two sons from the US, after a successful financial career had allowed him to retire in his late 30s.
Monaco’s building boom shows up in new home sales. The 72 sold in 2018 were a record, 44 per cent up on the 50 sold in 2017, also a historic high. New homes as a proportion of total sales have grown from 4 per cent in 2013 to 14 per cent last year, according to Savills’ analysis of government data. Works are continuing on Le Portier, a €2bn project to reclaim 15 acres of prime Monaco real estate from the Mediterranean by 2025.
Booming sales highlight the fact that for every older person fed up with Monaco’s expansion, there are plenty of wealthy thirty and forty-somethings keen to fill their shoes.