Studio Flats In London

It could be ten years before it is complete, but a new island to be built off Monte Carlo is already attracting the attention of property investors.
With an area of 275,000 square metres, the island will include new apartments, hotels and retail units, with an estimated build cost of between 5 and 10 billion Euros.
Of the sixteen developers who submitted proposals for the island last year, five have been chosen to submit further details, with the winning bid anticipated to be announced in the autumn.
The second smallest country in the world, Monaco has France and Italy as neighbours, and realistically can only extend her land mass by reclamation from the Mediterranean, as it did some years ago with the area known as Fontvieille, and by building islands.
The arrival of new property for sale in Monaco will be particularly welcome. Monaco recently overtook London as the most expensive property destination in London.
Although new properties are currently being built in Monaco, these are for local residents, and not those seeking residency in the principality.
Residents in Monaco enjoy benefits including no income tax, and is a major attraction for business men and women.
Current properties for sale in Monaco include a small 30m2 studio at 720,000 Euros, a one bedroom 75m2 apartment at 1,500,000 Euros and a 2 bedroom 2 bathroom apartment at just over 3,000,000 Euros.
Monte Carlo
The classic rules of supply and demand in the real estate market are likely to see Monaco property prices rise further in the short and medium term, according to Monaco property specialists.
With one bedroom apartments in the Principality already at the million Euro level, the lack of properties coming to the market and the absence of new builds could make today’s prices seem like a bargain in five years time.
‘Three years ago there were six hundred properties on the market’, they say, ‘Now there are two hundred. Coupled with increased demand, especially from the UK, prices have been rising and could go quite a bit further if current trends continue.’
Visitors to Monaco and Monte Carlo are often surprised at the lack of apartments for sale as they can see new buildings under construction.
‘The apartment buildings under construction are for local Monaco people’, explain the property company, ‘Rather than for the open market where anyone can buy a property. The situation is unlikely to improve in the short and medium term but the number of buyers is rising – and consequently so are the prices. Monaco now has the highest priced property in Europe.’
Other reasons for the shortage of property in Monaco include that residents are holding on to their apartments longer, enjoying the tax free status Monaco affords, and as the owners see their property rising in value holding on to it as an investment.
To maintain residency in Monaco, residents need to live in the Principality for six months a year. Winter time often sees a lot of apartments mothballed with the owners wintering in Barbados or St Lucia.

Monaco is known the world over for her Grand Prix, million and billionaire residents, glamour…and some of the most expensive property in the world.
But with the world on on the brink of a possible recession and falling house prices both in the US and Europe, Monaco could buck the trend in the years ahead and see surprisingly big gains in prices while those around her go into freefall.
Part of Monaco’s price increases in recent years, and for the medium term future too, is that new housing being built is for locals, and a strong new supply of openly available apartments is unlikely to happen for ten years – and with strong demand and little supply it suggests further price rises are likely for 2008.
British citizens have moved to Monaco in high numbers in recent years and as UK taxes show no sign of falling this large group is expected to swell further in 2008.
Previously a relatively small group of Monaco residents, the number of British people living in Monaco has doubled in the last two years since 2005, with some 3000 now claiming residency in Monaco.
Attaining residency in Monaco necessarily means renting or buying an apartment. The lowest priced property on the market at the moment is a 30m2 studio with a 7m2 balcony in the Fontvieille district at 720,000 Euros. With closing costs this rises to over 800,000 Euros. As well as buying a property, to gain residency in Monaco a bank account needs to be opened in the Principality, with account opening deposits varying between 100,000 and 500,000 Euros.
Mid range is a 210m2 3 bedroom 2 bathroom apartment in Monte Carlo, close to Casino Square, at 4,200,000 Euros. And at the top end is a three floor penthouse apartment in the well known Eden Star development at 25,000,000 Euros, equivalent to around 16 million Sterling.
At the opening of Monaco’s new consulate in London recently, Prince Albert of Monaco acknowledged the important contribution British people are making to his country, and said he would like to see more in the Principality. Prince Albert is particularly keen to see British entrepreneurs move to Monaco, but one travel guide for the country doesn’t think Prince Albert has fully thought through his ideal scenario.
‘Prince Albert said recently that he welcomes British entrepreneurs moving to Monaco, but that he wouldn’t be distributing leaflets on London’s streets to get more to do so. But he is missing the point. The costs involved in moving to Monaco are prohibitively high, even compared to London standards, and if he is serious about British talent moving to Monaco while we don’t expect Monaco to remove the financial barriers he could move to lower the bar a bit at least.’
A well respected US magazine recently claimed Monaco has the most overpriced real estate in the world, claiming the rental returns as part of their figures meant the tax haven’s property costs were unduly high.
In response a Monaco internet site says the American magazine are wrong, and have forgotten why Monaco’s property prices are high in the first place.
‘The error they made was comparing Monaco with places like Rome, Warsaw, Los Angeles and Vancouver, and they also overestimated closing costs. While admittedly high in Monaco at around 11 per cent, it’s not common to be 20 per cent that their research was based on.’
Monaco property buyers would find it difficult to find anything at all for 700,000 Euros, even for the smallest studio apartment, and realistic starting prices are from a million Euros.
Prices in 2007 rose dramatically, with the Casino Square area seeing price increases close to forty per cent, and in Fontvieille, close to the helicopter pad which connects Monaco with Nice Airport, prices nearly doubled.
Overall it is thought that demand has grown by around thirty five per cent over the last five years, with few new Monaco properties becoming available to meet the new buyers expectations.

Central London property prices have risen again, and have overtaken Monte Carlo’s property prices, according to recent reports.
While the future of London property prices remain good, there are some doubts if the increases can be sustained, and Monte Carlo remains the most expensive real estate for property that is priced in Euros.
Interest rates in the UK have been rising recently, and there is a danger of UK property prices generally falling, which could have an impact on the top end London market.
But Monte Carlo property prices are almost certain to rise in the short and medium term according to a Monte Carlo travel guide, and possibly to the level where the cost per square foot will exceed that of London.
‘Three years ago there were around six hundred properties to rent or buy in Monte Carlo – that has declined since then to two hundred – but demand is as high as ever, pushing prices up more.’, explain the travel guide.
With property prices in Monte Carlo the second highest in Europe and highest of all the countries that price their properties in Euros with one bedroom apartments after closing costs starting at around a million Euros, longer term the shortage of property in Monaco will be helped a new island being built off Monte Carlo.
It’s thought unlikely that the new island will reduce prices much overall though, despite the increase in the number of property units available as Monte Carlo is always in demand.
Monte Carlo property specialists believe that most new apartments will be sold to investors off plan well in advance of any building work starting.
‘The problem with property in Monte Carlo is not the lack of buyers’, they say, ‘but more the lack of good properties for buyers to choose from. Hopefully the new island will address that. Everyone in Monaco is aware of how important the environment is thanks to Prince Albert’s initiatives in pushing it up the political agenda, and any new developments will be low rise. With the good weather in Monaco expect to see plenty of solar panels on the roofs to make the buildings energy efficient’.
It is possible that the new island will be incorporated into future Monaco Grand Prix, which could give more overtaking opportunities.
One Monte Carlo property company reports that new enquiries are running at a high rate, with many buyers keen to buy now in case prices go up more, either for residency, or more commonly than before for investment.
In recent years the UK market has accounted for much of Monaco’s property price rises, as the number of buyers has increased to 40 per cent of the total market, but in recent months buyers from other European countries and from further afield, Australia and Canada in particular have been noticeable.

No surprise – Monte Carlo is No 1 in the Global Property Guide’s list of World’s Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up. [www.globalpropertyguide.com]

Battling for the number 2 position are prime central Moscow and London. Prime central Moscow’s US$20,853 per square metre price tag slightly outpaces core Prime London’s US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.

London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.

Tokyo and Hong Kong come in fourth and fifth, respectively. New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m. Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m. The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy. Data were collected during 2008. The US dollar exchange rate used is that of January 27, 2009. Bargain hunters’ dream For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia. Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m. Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia. Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China. Indonesia was the last country to recover from the 1997 Asian Financial Crisis. However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth. Five Latin American cities complete the list of 10 cheapest cities for property buyers – Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru. The same countries also tend to earn good rental yields. OvervaluedRental yields are generally below 5% in most European cities, suggesting that property is still overvalued. Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2% and Athens at 2.7%. Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva. Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi, and Mumbai)Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%. The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima. High returns can also be expected in Latin American cities. Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador). Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%. House price movements The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions. The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries. This is complemented by the relatively lower cost of international air transport. Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union. The result of these changes has been a remarkable increase in cross country real estate investments – helping make the boom, and the bust, truly global.

——————————–Description: The Global Property Guide is an on-line property research house. Terms of Use: On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com Sites and newspapers found not to be providing a link to us will be removed from our press list. Requests for Comments:Requests for comments are best made by telephone to +(63) 917 321 7073. UK-based callers should telephone before lunchtime. Our local time is Hong Kong time, i.e., standard time + 8.00Economics Team:Prince Christian Cruz, Senior EconomistPhone: (+632) 750 0560Email: prince@globalpropertyguide.comPublisher and Strategist:Matthew Montagu-Pollock Phone: (+632) 867 4220 Cell: (+63) 917 321 7073Email: editor@globalpropertyguide.comAddress: Global Property Guidehttp://www.globalpropertyguide.com 5F Electra House Building115-117 Esteban StreetLegaspi Village, Makati CityPhilippines 1229info@globalpropertyguide.com

As homeowners on both sides of the Atlantic watch to see if their property’s value takes a dive, two prime areas of real estate where the super-rich choose to live have seen price increases, showing there is still money in the system, albeit for a niche market.
Real estate watchers will know that top end London prices rose sharply in the last three years, but less well reported has been how New York’s Manhattan has fared. While London prices could fall this year, Manhattan could see rises.
Suprising given that New York real estate prices dropped by four per cent in 2007, and yet, like London, pockets of an area that is seeing property price reductions can see good inflation for existing homeowners hoping their property portfolio will continue to perform well.
In fact, when looking at the real estate markets for the two leading financial centres of New York and London, there seems to be a breakaway section of the property market that behaves differently from other areas in the city where the super rich don’t favour, and are small enclaves.
Monaco, a financial centre as it is a tax haven, and only a square mile in sze, is another enclave of the wealthy that sees property behave quite differently from neighbouring areas on the French Riveria such as Nice and St. Tropez.
‘We often hear politicians comment that the rich are getting richer’, comments a UK based property company who sells property in Monaco, ‘And not only are the rich getting richer they have a micro economic property bubble in Manhattan, London and Monaco where the number of properties being sold and their prices are completely independent, and seperate from the rest of Europe and the U.S.’
Monaco property prices rose by over fifteen per cent in 2007, and in Manhattan seventeen per cent – but astonishingly properties in Monaco priced at 10 million Euros and above (around US$ 15 million) acheived a price hike of over twenty five per cent.
Part of Monaco’s price increases in recent years, and for the medium term future too, is that new housing being built is for locals, and a strong new supply of openly available apartments is unlikely to happen for a decade – and with strong demand and little supply it suggests further price rises are likely for 2008.
British citizens have moved to Monaco in high numbers in recent years and as UK taxes show no sign of falling this large group is expected to swell further in 2008.
Previously a relatively small group of Monaco residents, the number of British people living in Monaco has doubled in the last two years since 2005, with some 3000 now claiming residency in Monaco.
Time will tell if London and Manhattan’s top properties also continue to rise in the year ahead, pushing the markets for the super rich still further away from other real estate trends.

Property values are on the rope in the US, UK and many other countries – and as house values slip there is little homeowners can do as their investment keeps sliding – but wait and hope that their economies recover, and boost buyers confidence enough to get the property markets going again.
But there are some areas where the property bubble just hasn’t burst yet, and they’re such niche markets that they might just withstand current economic woes seen elsewhere.
Real estate watchers will know that top end London prices rose sharply in the last three years, but less well reported has been how New York’s Manhattan has fared. While London prices are falling in many boroughs, one or two are still showing slight increases on their 2007 values, but overall London prices are expected to dip this year.
And while New York real estate prices could drop too this year, Manhattan could see gains in property prices.
Suprising given that New York real estate prices dropped by four per cent in 2007, and yet, like London, pockets of an area that is seeing property price reductions can see good inflation for existing homeowners hoping their property portfolio will continue to perform well.
In fact, when looking at the real estate markets for the two leading financial centres of New York and London, there seems to be a breakaway section of the property market that behaves differently from other areas in the city where the super rich don’t favour, and are small enclaves.
Monaco, a financial centre as it is a tax haven, and only a square mile in sze, is another enclave of the wealthy that sees property behave quite differently from neighbouring areas on the French Riveria such as Nice, Cannes and St. Tropez.
‘We often hear politicians comment that the rich are getting richer’, comments a UK based property company who sells property in Monaco, ‘And not only are the rich getting richer they have a micro economic property bubble in Manhattan, London and Monaco where the number of properties being sold and their prices are completely independent, and seperate from the rest of Europe and the U.S.’
Monaco property prices rose by over fifteen per cent in 2007, and in Manhattan seventeen per cent – but astonishingly apartments in Monaco priced at 10 million Euros and above (around US$ 15 million) acheived a price hike of over twenty five per cent.
Part of Monaco’s price increases in recent years, and for the medium term future too, is that new housing being built is for locals, and a strong new supply of openly available apartments is unlikely to happen for a decade – and with strong demand and little supply it suggests further price rises are likely for 2008.
British citizens have moved to Monaco in high numbers in recent years and as UK taxes show no sign of falling this large group is expected to swell further in 2008.
Previously a relatively small group of Monaco residents, the number of British people living in Monaco has doubled in the last two years since 2005, with some 3000 now claiming residency in Monaco.
Time will tell if London and Manhattan’s top properties also continue to rise in the year ahead, pushing the markets for the super rich still further away from other real estate trends, and creating enclaves that belong to the wealthy.

Many areas of Europe could be on the edge of a property price recession, Monaco it seems knows no limits for her prices.
Prices have risen consistently in recent years, to the point where it overtook London earlier this year to become the most expensive location in the world for real estate, with London overtaking Monaco again recently.
The studio is just 43m2 in size witha 15m2 terrace, and located in Jardin Exotique, an area of Monaco that becomes behind better known Monte Carlo and Fontvieille in popularity for potential Monaco property buyers.
Monte Carlo has traditionally been the first area most people ask for as it is so well known, while Fontvieille, which has its own harbour and hosts the annual Monaco Yacht Show is popular among business people as the heliport is based there.
Jardin Exotique is the highest area in Monaco, and most apartments enjoy good Mediterranean views.
Monaco is due to invest heavily in Jardin Exotique’s infrastructure in the near future, making property there attractive to investors looking for property appreciation. Overall, it is possible that Monaco property prices could overtake London again in the coming months.
Monaco property prices are almost certain to rise in the short and medium term according to a Monaco travel guide, and possibly to the level where the cost per square foot will exceed that of London.
‘Three years ago there were around six hundred properties to rent or buy in Monaco – that has declined since then to two hundred – but demand is as high as ever, pushing prices up more.’, explain the travel guide.
With property prices in Monaco the second highest in Europe and one bedroom apartments after closing costs starting at around a million Euros, longer term the shortage of property in Monaco will be helped by a new island being built off Monte Carlo.
It’s thought unlikely that the new island will reduce prices much overall though, despite the increase in the number of property units available as Monaco property is always in demand.
Monaco property specialists believe that most new apartments will be sold to investors off plan well in advance of any building work starting.
‘The problem with property in Monaco is not the lack of buyers’, they say, ‘but more the lack of good properties for buyers to choose from. Hopefully the new island will address that. Everyone in Monaco is aware of how important the environment is thanks to Prince Albert’s initiatives in pushing it up the political agenda, and any new developments will be low rise. With the good weather in Monaco expect to see plenty of solar panels on the roofs to make the buildings energy efficient’.
It is possible that the new island will be incorporated into future Monaco Grand Prix, which could give more overtaking opportunities.
One Monaco property company reports that new enquiries are running at a high rate, with many buyers keen to buy now in case prices go up more, either for residency, or more commonly than before for investment.
In recent years the UK market has accounted for much of Monaco’s property price rises, as the number of buyers has increased to 40 per cent of the total market, but in recent months buyers from other European countries and from further afield, Australia and Canada in particular have been noticeable.

Monte Carlo property prices could rise steeply in the next couple of years, and Europe’s favourite tax haven could become out of reach for some millionaires, according to a Monaco travel guide.

Several recent surveys have all shown good indicators for Monaco, with more people likely to apply for residency and buy property. Buyers from the UK in particular are expected to rise in number.

Commenting on the findings, the travel guide say ‘While we would like perhaps to imagine that it’s the fine cuisine and good weather in Monaco that is attracting the British to Monaco, we know realistically that it is because residency entitles them to a zero rated income tax.

One survey says that the number of millionaires in the UK will increase four fold in the coming years, and the UK has become a very important market for Monaco real estate recently – that will boost prices as the demand feeds through. Another survey coming out of the UK predicts that house prices will rise by 70 per cent over the same period. Inheritance tax in the UK is quite a big issue at the moment as many more people are above the government threshold due to their house price, and in Monaco there is no inheritance tax, which gives an added incentive for some to move to a tax haven. People choose to leave their money to their children, cutting out the government that would take a large share’

A CBRE report on world property also noted that Monte Carlo real estate prices match those of London and New York’s Manhattan.

‘Apart from the very obvious financial advantages that can be had by moving to Monaco’, conclude the guide, ‘Perhaps the most telling survey for us was the one by Laura McKenzie, a US travel expert. She puts Monaco as the number one destination for safety. For people with money preserving and optimising what you have in the bank is important, but so is the ability to walk down the street without fear. Monaco provides both the financial and personal security the wealthy seek, and it should come as no surprise when they decide Monaco is the best place for them and their families to live.’
New Island

Apart from being a tax haven, the principality is perhaps best known for the Monaco Grand Prix.

In addition to the race that takes place each May, the world’s premier yacht show is held in September, attracting millionaires and billionaires to view what the yachting world has to offer.

A Monaco real estate specialist say that the yacht show in September is symptomatic of the way Monaco has progressed in recent years in attracting high profile events to the principality.

‘Apart from the Monaco Grand Prix and the yacht show, there is the tennis in April and this year for the first time a flower show. If it goes the same way as the other events it will be a success in its own right before too long. Having different events throughout the year benefits the hotels in Monaco and the tourist sector generally’.

The European tax haven is the second smallest country in the world, but the map of Monaco was re-drawn twenty years ago when land was reclaimed from the sea. Earlier this year bids were invited for an island to be built off Monte Carlo.

‘When complete the island will add to the Monaco housing stock, and this might help dampen the property prices a little. But we anticipate that the apartment blocks will be low rise as Prince Albert is very keen to promote Monte Carlo as an environmentally sound place to live. We expect some of the properties will be reserved for key workers while the rest will be available for general sale. But overall we doubt if the new apartments will keep up with increased demand, and property prices in Monte Carlo will stay as high as London and Manhattan’.

It is also possible that when the island is complete that the Monaco Grand Prix circuit will change. Monaco has long been notorious for a lack of overtaking places, and this might help alleviate the situation.

‘Overall all the key elements are in place to see a significant rise in Monaco property prices in the near and medium term. It could produce better results than an evening at the Monte Carlo casino’.