Luxury home prices in Monaco soar due to lack of development
May 28, 2018 - Monaco
With supply in short shrift, Monaco still beat out Hong Kong as the priciest luxury home market in the world, according to a yearly overview of the principality released this week by the consultancy Savills.
The principality trounced the Chinese SAR as the average home price in the former climbed to € 4.5 million ($5.26 million) in 2017, up 6% from the previous year.
“Wealthy residents hold their property for long periods, while little new stock is added,” Paul Tostevin, associate director at Savills, wrote in the Spotlight report on Monaco.
With an average price per square metre of € 41,300 per square metre ($4,500 per square foot), Monaco remains the most expensive residential market in the world – 13% than prime Hong Kong, the second most expensive market.”
Home to 139 nationalities, Monaco suffers from "extreme" land constraint. New development sites rarely becomeavailable in the principality, with ongoingmajor schemes like Sporting d’Hiver set to deliver only properties to rent rather than buy.
The dearth of available homes to own in the principality is working against strong demand from high-net-worth individuals around the world. Only €2 billion ($2.3 billion) worth of homes were sold in Monaco last year, a staggering 23% dive from sales of €2.7 billion the previous year.
Project Portier, which began last year, is set to add six hectares and 54,980 square metres of new habitable space of new land to Monaco, but even this will make “only a dent in the supply shortage,” researchers stated. “We expect new build transaction volumes to drop off significantly in the near term."
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