Monaco has always been one of the best places to invest in real estate around the world, and by all indications, this is not about to change anytime soon.
If you’re looking for excellent opportunities in commercial property or apartments investment, take a deep dive into what Monaco has to offer.
Here are the top reasons why Monaco properties are considered a safe haven for investors.
- The value of Monaco real estate has historically been rising since 2006
In the last five years, Monaco has been the most expensive real estate market in the world, outperforming other prime markets, such as Hongkong, New York, London, and Paris. From 2006 to 2019, the average price per square meter in the principality has increased by around 342%, from approximately €14,000 in 2016 to €48,000 in 2019.
While property prices in the Principality have also been affected by economic events, such as the Global Financial Crisis in 2008/2009, the market has time and again demonstrated its resiliency by bouncing back just within a year or two. With economies worldwide facing volatility due to the COVID-19 pandemic, Brexit, and other extraordinary events, the ability of the Monaco real estate market to recover fast proves that it’s a safe haven for investors worldwide.
- Inventory and supply are limited while demand remains strong
Monaco is a tiny state, with an area of only 2.2 square kilometers, so real estate here is significantly limited. Supply cannot keep up with the increasing demand, and this is constantly driving real estate prices up. Rental values were at their highest level as of February, 2020, increasing 20% from the previous year across all property types.
The strong demand is hugely driven by the residency requirement of owning or renting a home in the Principality. The government has recently tightened its policy, and now requires residency applicants to demonstrate that their rental property corresponds to their needs. This aims to avoid renting properties that are too small just to be in compliance with residency requirements. As a result, the demand for larger apartments has been rising of late.
- The Principality remains politically and economically stable
Monaco’s economic and political stability is a huge factor in its attractiveness to investors. The World Bank has ranked it 4th in its Political Stability Index for 2019. Monaco has a constitutional monarchy where its sovereign is also the head of state, but shares powers with a unicameral National Council whose members are elected by the people.
While tourism is Monaco’s primary industry, the state’s economy is driven by the banking and financial services sector, as well as science and technology activities. The GDP has consistently seen positive growth over the past ten years, except in 2017. The government has also adopted policies that make it easy to start a business in Monaco.
- Monaco is a tax haven
Monaco’s fiscal policies are the top reason high net worth individuals choose to be a resident here, driving the demand for real estate. There are no personal income taxes, capital gains taxes and net wealth taxes. In addition, businesses who make more than 75% of their profits locally are not subject to corporate income taxes, except for those engaged in manufacturing or the selling of intellectual property rights, which are subject to a 33.33% corporate tax on profits.
- The Principality is well known for safety and security
Monaco has very low crime rates, allowing high net worth individuals to move about freely, without having to worry about their personal safety and security. The ratio of policemen to residents is one to 100, making the police force the largest in the world per capita and per square feet.
- Enviable quality of life
Monaco is a playground for the rich and famous, thanks to its many attractions, world-class sporting events, Mediterranean climate, and entertainment destinations.
The city’s legendary casinos, luxury beach resorts, unparalleled yachting, and cultural performances in awe-inspiring venues like the Opera de Monte Carlo and the Princess Grace Ballet Theatre make living here truly exceptional. Annual events like the Monte Carlo Grand Prix, the Rose Ball, the Monte Carlo Rolex Masters, and others, ensure that the Principality’s luxury lifestyle is top of mind for the world’s wealthiest.
Monaco’s healthcare and education systems are also of the highest quality, as well as the fabulous shopping, dining, and other recreational activities. All these contribute to Monaco’s attraction as the chosen residence of wealthy individuals from around the world.
If you’re looking for an investment property in Monaco, we will be more than happy to assist you. Our portfolio includes a wide range of properties, from smaller apartments to luxury penthouses, attracting renters of any budget or preference. We also have a widespread network that gives us access to excellent investment properties in the Principality. Give us a call at +377.97.777.000 or send us an email at hello@spark-estate.com. You can also drop us a note here.