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Monaco’s Luxury Property

The sovereign city-state of Monaco is home to the most millionaires per capita in the world and rising. Cityscape takes a closer look at its property market, its unique selling points and investor considerations.

April 2015

There are now more billionaires in the world than ever, with Europe home to the highest number of Ultra High Net-Worth Individuals (UHNWIs), and growing.

The number of UHNWIs – those with USD 30 million in assets or more – rose by 3% in 2014, according to data compiled for Knight Frank’s Wealth Report by WealthInsight.

Some 5,181 people saw their wealth rise beyond the USD 30 million bracket, while 53 individuals became billionaires in 2014, taking the world’s total billionaire population to 1,844.

By region, Europe is home to the highest number of UHNWIs, with a population of 60,565, followed by North America and Asia, with 44,922 and 42,272 respectively.

According to Liam Bailey, Partner and Department Head at Knight Frank’s Residential Research team, Monaco is set to almost double its population of ultra-wealthy residents over the next 10 years.

The Principality of Monaco, with its lack of income tax, low business taxes, and all-round reputation as a tax haven, has long been a domicile of choice for the wealthy.

A sovereign city-state, located on the French Riviera, Monaco has an area of just over two square kilometres, and a population of 36,371 – making it the second smallest and most densely populated country in the world.

Monaco is composed of six districts: Monaco Ville, Condamine, Monte Carlo, Fontvieille, Larvotto and Moneghetti. Real estate in Monaco is the most expensive in the world. Monaco’s economic and political stability makes it one of the leading luxury real estate destinations for wealthy individuals globally.

Offering Mediterranean Sea views, lush hillsides, and stunning architecture, it’s easy to see the appeal.

“Benefitting from year-round sunshine, Monaco enjoys a Mediterranean climate with mild winters and long sunny summers. For years, Monaco’s first-class amenities and strong advisory infrastructure has been attracting wealthy visitors and prospective investors who can have immediate access to private banks, lawyers, accountants and wealth managers. Monaco’s elite lifestyle is further sustained because of the safety and personal security available to HNWIs,” said Joachim Wrang-Widén, Senior Vice President – Europe, Middle East, and Africa at Christie’s International Real Estate. Christie’s International Real Estate is considered one of the world’s leading luxury real estate networks and a subsidiary of Christie’s auction house. It operates 135 brokerages in 46 countries, including Monaco.

Wrang-Widén continued to list Monaco’s attractions: “It is also a premier place for sporting enthusiasts, hosting a number of high calibre events annually such as the Formula 1 Grand Prix, the Monte-Carlo Masters and the famous yacht show. Last and most importantly Monaco is renowned as a wealth-friendly location, with no income tax on individual residents and low business taxes. Many wealthy foreign citizens have set up residence or business in Monaco, which today is home to the most millionaires per capita in the world.”

SPACE AT A PREMIUM

There is a caveat for those looking to invest in property in the Principality – this is one market where space really is at a premium.

“Given Monaco’s restricted space, the stock shortage should be the main factor to keep in mind when looking for a residence in this affluent area. While the market is very transparent there could be potential future limitations coming from construction of new developments and constant upgrades going on which could potentially change the scenery or the views of a beautiful luxurious residence. Taking advice, acquiring knowledge of potential future redevelopments is highly recommended,” explained Christie’s Wrang-Widén.

Monaco has tried to overcome its space shortage, and has reclaimed more than 100 acres of land from the sea since the early 1960s. However, space remains limited in this densely populated state.

Typical investors range from families and couples to international investors and retirees, but according to Wrang-Widén many are mostly entrepreneurs. “People come here in order to shelter their wealth and optimize their tax position,” he admitted.

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