A first glance at property prices in Monaco will make you laugh or cry.

Fancy a nice view of the harbour from your spacious 2 bedroom apartment? You’ll need to be able to write a cheque for €20 to €30 million as a starting point. The smallest studio will be pushing €2 million and the average price across all transactions is in the €4.5 million to €6.5 million range.

It all comes down to economics 101, supply and demand. Monaco is a global brand and the best known tax haven in the world. It remains the world’s most expensive real estate market, 13% higher even than Hong Kong.

An area of land the size of Hyde Park is home to 38,000 residents, of whom one in three are multi millionaires along with a smattering of billionaires. They come from 139 countries to make the Principality their home and the trend is for larger families to move here to enjoy the climate, the security and the financial advantages.

The residency rules mean that you need to buy a property of an appropriate size for the number of people who will be living here, so you can’t squeeze your spouse and four kids into a one bed pied-a-terre. The mortgage rules are different as well. You deposit 30-40% of the purchase price with a Monaco private bank who then fund 100% of the purchase with an interest only mortgage. We are seeing rates as low as 1.2% fixed for five years.

Here’s the interesting part. If you can get past the eye-watering prices, the still increasing global demand coupled with the very limited supply means prices continue to rise healthily year after year. 2018 was exceptional, with an average increase across the board of 18%. However, if you take a 10 year view you’ll see average increases across the different districts of Monaco of between 7 and 11%. Fontvieille, built on reclaimed land in the 1970s, has seen price rises of 124% in a decade. Monte Carlo, home to the famous casino and Hotel de Paris, has seen prices rise by 112% over that same timeframe.

So if you’d spent what you thought was an unfeasible €2 million on a modest 2 bedder in Fontvieille back in 2010, you’d now be sitting on a capital gain of €1.5 million. And it would only have cost you €2000 a month for the mortgage.

Doesn’t look quite so mad now, does it? Click here for a 2020 update on each district in Monaco:

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