Monaco real estate trends: 2024 set for an upturn in demand, says leading property agent
Benoit Martin - La Costa Monaco Properties
Monaco Tribune shares an exclusive interview with Benoit Martin, Sales Director at the Monaco real estate agency of La Costa Properties Monaco since 2021.
La Costa Properties Monaco, 40 years in the field
La Costa Properties Monaco was created by Luciana Gaia Lebon and remains a family-run business. Situated in the prestigious Carré d’Or district, the Monaco real estate agency’s 15 staff deal with property management, rentals and transactions. As one of Monaco’s leading real estate agencies, La Costa Properties Monaco boasts an enviable portfolio of Monaco property for sale and rent.
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Its early clientele was primarily Italian and from other European countries, but has since expanded beyond Europe’s borders. The young sales force is growing, handpicked to cover the spread of clientele in terms of language and country of origin, providing both property and legal advice.
Key takeaways from 2023:
“It ended better than it started!” says Benoit of the Monaco real estate agency’s year. “Many projects that started out in the first half of the year didn’t complete until the second half,” he adds.
A general observation is that sales take longer than previously.
“There’s a whole administrative side that is much slower now,” Benoit explains, “especially for the British.”
Since Brexit, British nationals must now go through the French embassy to obtain a resident’s permit for France before they can apply for Monegasque papers.
“It used to take them a month from start to finish to get their residency permit. Now it can take 3 to 4,” Benoit states.
Benoit also has another explanation, “Yes, this is Monaco, and generally speaking, our clients have the means to finance their acquisitions; however, some may need to apply for a mortgage, and this is taking longer too.”
Having spoken to a number of banks, and to industry colleagues, Benoit notes that it is an industry-wide phenomenon.
This, along with more expensive lending rates, could explain the sharp rise in demand for rental properties, which in turn has driven up rents. Transaction prices, on the other hand, have been flat, or even slightly lower at the very high-end and in the new-build sectors of the market.
For the Monaco real estate agency, the two market sectors seem to have balanced each other out, with 2023 neither a ‘bad vintage’ nor a ‘Grand Cru’, but a “palatable” one.
Current Monaco real estate market trends
According to Benoit, at the moment, people appear to be looking for larger properties, with two or three bedrooms, or large studios and one beds for single people.
“It is mostly families that are arriving or people who plan on living in Monaco year-round and who, therefore, need space. And demand is out-stripping supply,” Benoit notes.
Despite this, Benoît says the agency is able to source some of these larger properties, even if there aren’t many out there, especially to rent.
“On the sales side, a lot depends on the property’s price and the building it’s in because the clientele is more and more selective,” Benoit explains. “The new, younger clients are looking for new properties like the ones in big cities in Europe or the States. That’s why properties in L’Exotique were snapped up quickly by buyers and tenants alike, for example.”
He adds: “There is less demand for older, less well-maintained properties. Hence, we suggest to owners that they carry out renovations between tenants, so they are easier to rent out or sell.”
This new trend of ‘buy-to-occupy’ seems to have accelerated since 2020, Benoit notes, along with the changes in residence criteria.
Benoit warns against the impression that significant amounts of homes are coming to market soon. “Bear in mind a lot of the current construction work is for state housing; it won’t necessarily satisfy private demand,” he explains.
In some cases, Mareterra being a case in point, apartments are being sold even before the project is completed. This prompted us to ask if there is still much speculation in the market. “Absolutely, and mostly by people who already live in Monaco,” replies Benoit. “Remember when you buy off plan, you’re ‘buying into a project,’ and if you get on board early on, as was the case for L’Exotique, for example, prices can be very attractive.” Now complete, L’Exotique’s modern architecture and high-end features are in strong demand. “The capital gains can be substantial if you have the means up front,” Benoit notes.
We wondered if environmental concerns are a major criterion now. “Not at the moment,” Benoit replies, “That might be the case later, but for now we have more ‘young-at-heart’ than young clients, and the market is so saturated that the criteria are more to do with size and location.”
Speaking of location, we asked if certain districts are more sought-after than others. No surprise that top of the list is the creme de la creme, the Carré d’Or. “Next, we really get a lot of demand for the new Larvotto district because the beach is a real success; it’s a lively district, and now the Mareterra project is nearing completion, the major disruption is over,” Benoit says. He adds: “Also, Fontvieille, because it’s quiet, there isn’t much construction work going on. The new shopping centre is coming soon, but it’s not in front of existing homes in the district, so there should be relatively little disturbance.”
2024 Monaco Real Estate Predictions
What are the prospects for 2024 Monaco real estate in Benoit’s opinion? “Uncertain,” he states. He anticipates there will be an upturn in demand, with a new clientele looking to settle in Monaco. However, he cites 3 main areas of concern.
1. Interest rates: “What’s difficult to predict is the economy. There’s uncertainty about rates, even if, for the moment, they’re not going up. Some of the banks are quite pessimistic about rates dropping, we just don’t know,” he explains.
2. Administrative demands: “There are more and more of them to comply with European demands in terms of conformity and compliance. We do it as conscientiously as possible, and we were perhaps a little better prepared than others, but it is certainly a constraint,” Benoit explains.
3. Dissuasive red tape: The Sales Director believes that when too many administrative demands are made of potential buyers if settling in Monaco is made too complicated, they will not take part in it? In fact, it is already happening. “Take other economic hubs like Dubai for example, which are a little more flexible. We have it on good authority that money is going there instead of coming to Monaco,” Benoit says. And while the agency tries to make the process as painless as possible for its clients, ultimately their decision to come to Monaco or not is out of La Costa Properties Monaco’s hands.
Recognising the necessity for more transparency, since the fight against money laundering is in everyone’s interests, Benoit believes a balance needs to be struck.
“Let’s not forget Monaco has its own special identity, its specific characteristics. We should be careful not to lose them in the process. It’s about balance,” he explains.
And while Benoit believes 2024 will be a good year for the Monaco real estate agency, he feels the outlook is too uncertain for now to make any confident predictions.
Interview conducted by Camille Esteve