New construction market
This past year, the country’s new construction market shrank by 32% due to a low volume of property sales (a drop of 52%). Only 26 new units came onto the market and most of them were strictly for rental purposes (e.g., Palais de la Plage and the Winch).
It is anticipated that new construction sales will pick up this year and in 2022, with new projects on the horizon, including the 45G in La Condamine and l’Exotique in Le Jardin Exotique, which are already sold out.
While the resale market made up 90% of transactions this actually marked a significant drop to almost 2017 levels. The fall of 21% was driven by an 8% drop in the number of transactions. However the price effect was almost insignificant.
Without doubt , COVID-19 related policies and restrictions had a severe impact on tourism (with a drop of 65% in Q2 and 54% in Q3) and constituted the main driver behind the low volume and market mix. In particular, there was a drop in the sales of larger apartments, whereas resales of small units (studio and 1-bedroom) remained dynamic, with an increase of 3% in the number of sales. Even so, prices have remained relatively stable – close to their 2018 peak level.
The average price per square meter dropped by 1.1% this past year, to an average of 47,619€ per square meter. While the price per square meter in studio apartments decreased by 3.1%, the price for larger units (3-bedrooms+) increased, reflecting their continued appeal. It is worth pointing out that Monaco is an atypical market in this regard. In most markets, the price per square meters is higher for smaller apartments, yet, in Monaco, larger properties command a premium.
Monaco’s real estate market has proven its stability. With no public debt, the Monegasque Government is focused on improving quality of life. This is evident not only in everyday measures, such as the creation of a new police unit, but also through the New Princess Grace Hospital and the Testimonio II project, which will lead to the creation of the New International School. Overall, Monaco will remain an attractive real estate market, especially considering the increased risk of global fiscal pressure associated with the costs of the COVID-19 pandemic.