The Monegasque Institute of Statistics and Economic Studies (IMSEE) recently published a crucial study concerning the evolution of state housing in Monaco between now and 2040. This analysis aims to estimate the need for housing according to the growth of the Monegasque population and the current capacity to provide housing in the Monegasque state-owned real estate stock. We will take a closer look at the conclusions of this study for the future of the Principality's real estate market, which will undoubtedly be more tense.
As of December 31, 2022, Monaco had 9,686 Monegasques, including 5,263 women and 4,423 men. Since 2016, the proportion of Monegasques living in the estates has increased slightly, from 59.0% to 61.9%.
The state park includes all state-owned housing in Monaco. It is mainly made up of 2, 3 and 4 room apartments, totaling 3,826 housing units at the end of 2022.
More than 80% of the occupants of the state park are Monegasques, either as tenants or as holders of a Housing Capitalization Contract (CHC). Non-Monegasques occupy 12.7% of housing, while 6.2% of apartments are temporarily unoccupied, waiting to be proposed during future Allocation Commissions.
According to demographic projections, the Monegasque population is expected to increase by around 1,000 people by 2040, reaching an estimated total of 10,660 Monegasques. This growth is the result of factors such as births, naturalizations by Sovereign Ordinance, acquisitions of nationality by marriage and deaths.
At the same time, it is estimated that between 4,377 and 5,266 state-owned apartments will be needed by 2040 to accommodate between 65% and 80% of the Monegasque population. Taking into account the share of Monegasques residing in the areas, this would mean that between 31 and 80 additional housing units will have to be built each year from 2023 to 2040.
The National Plan for the Housing of Monegasques (PNLM), launched in 2019, already provides for the construction of 612 additional apartments beyond the deliveries already scheduled. These operations aim to cover the needs of 78.1% of Monegasques by 2040, thus exceeding the initial objective of 75%.
Seven real estate operations are planned to deliver 715 new homes by the end of 2027, with an average of 143 per year between 2023 and 2027.
The current situation of the Monaco real estate market raises significant concerns for the future, particularly for 2040. If the construction objectives of the national housing plan fail to provide sufficient goods, the government could be forced to seek alternative solutions, including the rental of property on the private market. The government is doing everything to alleviate this housing shortage, developers are constantly seeking to buy buildings to rebuild them by increasing the number of properties, however, even with extensions at sea, the limits of Monegasque territory are obvious, and the Urbanization is reaching its limits, making real estate investments crucial.
The law of supply and demand comes into play, because if the state rents in the private housing stock, fewer apartments will be available on the market, potentially creating a shortage for non-nationals looking to settle down or to stay in Monaco. This shortage could lead to a general increase in rents and prices per square meter, because residents who can no longer find rental accommodation will have no other choice but to invest in housing in Monaco.
The continued attractiveness of Monaco, due to its tax advantages, security, quality care and stable politics, will likely attract more and more new citizens in the future, creating strong demand. Therefore, the best solution would be to invest now by purchasing real estate to anticipate the increase in the Monegasque and foreign population.
Interestingly, despite persistent predictions of a collapse in property prices in Monaco, statistical data and recent trends contradict the skeptics. As we have examined several times in our blog, figures provided by IMSEE show an impressive increase of more than 60% in prices per square meter over the last ten years. Even in the face of a tense international geopolitical situation, the Monaco real estate market is holding up and we are convinced that it will continue to grow over the decades to come.
We would be happy to schedule a meeting to discuss the evolving future of the real estate market in Monaco, as well as the purchasing opportunities available. Among our current offers, we offer you a spacious 3-room apartment located in the Margaret residence. By investing in a property like this, you could not only secure your future by avoiding future rent increases, but also benefit from a solid investment.
In conclusion, the future of the Monaco real estate market is promising, but it is essential to take action today to guarantee stable housing in the future.
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