Currently, demand for rental properties in Monaco is skyrocketing. The problem? Available apartments are becoming increasingly scarce. In the face of this shortage, prices are soaring, and many clients are left waiting. This tense situation affects both newcomers and current residents.
If you’re searching for an apartment to rent in Monaco right now, it’s wise to be patient and vigilant, as any offer that comes up is likely to disappear quickly. Real estate agents agree: the rental market in the Principality is currently very tight. “Towards the end of 2023 and into early 2024, we’ve indeed observed a significant rebound in the rental market. Demand has exploded, but the number of available properties remains extremely limited,” notes Eugenia Petrini, head of Petrini Exclusive Real Estate Monaco. According to this expert, there is no doubt: there is clearly a shortage of rental apartments, especially larger three-bedroom units. “Many clients are therefore left waiting. Newcomers are increasingly struggling to find accommodation.”
“Clients search for months”
This shortage is affecting not only all types of properties but also all budget ranges. “Regardless of the type of space, available apartments are rare, and when they do appear, they go quickly. Clients have to search for months,” adds Jean-Yves Le Graverend, director of John Taylor Monaco. Prices have risen, but it’s not just a matter of budget; the rarity of available properties is the real issue. “This is very frustrating,” he laments. Even clients with substantial budgets are having trouble finding what they want. “In the rental market, luxury properties indeed move very quickly. Buildings like Les Terrasses du Port, the Memmo Center, or the MoNa, for example, are in high demand. There are long waiting lists of clients,” confirms Kate Dorfman, director of Caroli Real Estate.
Tenants are staying put
In this extremely tight context, it’s no surprise that many existing tenants are reluctant to move. “Current tenants are indeed hesitant to change apartments. They see rental prices rising and notice that options are scarce, which pushes them to stay in their current homes,” adds Eugenia Petrini. Florian Valeri echoes this sentiment: “Those who are already housed know that rental prices are climbing, so they have little incentive to move. They simply hope their rent won’t be increased beyond what is contractually stipulated.”
A wave from the Schuylkill
So, how can we explain this absence of rental properties and the sudden surge in demand? According to Gilles Graille, head of Pacific Agency, certain rehabilitation projects have intensified pressure on the rental market. “In recent months, we’ve seen a significant influx of clients with decent purchasing power, looking to rent two- or three-bedroom apartments. These are primarily former tenants from the Schuylkill building, which is undergoing rehabilitation. Others are coming from a building on Boulevard des Moulins, which is also being renovated. The already strong demand has been further exacerbated by these two projects.”
“A prolonged wait-and-see approach”
Meanwhile, many tenants seem to be adopting a wait-and-see attitude before diving into property purchases in the Principality. “There is indeed a longer wait-and-see approach to buying. Newcomers prefer to rent for two to three years before deciding whether they want to settle down long-term. They use this time to discover Monaco and adjust their expectations,” adds Florian Valeri. Another reason cited is that financial markets have provided excellent returns for the past three years. Some clients don’t see the point in tying up so much capital in a purchase. “This will evolve as financial markets fluctuate,” this professional cautions. International uncertainties are also weighing on the purchasing market. “Currently, clients prefer to rent rather than buy property in the Principality,” concludes Eugenia Petrini. Several factors contribute to this: high interest rates, international tensions, and the stalled association agreement between Monaco and the European Union, which has dampened the buying frenzy in Monaco. This overall climate is not conducive to investment.
The exception of small studios
Currently, all types of units are in demand and renting out quickly in the Principality. However, real estate agents point out one exception: small studios in less-than-ideal condition. Why? “Because today, with strict controls by the Public Security on the actual time spent in the Principality by those applying for residency, particularly for the tax certificate, clients prefer to pay several hundred euros more per month to live in a larger, more modern studio or switch to a one-bedroom apartment,” explains Florian Valeri.
(1) According to the professionals interviewed, for attractive properties, the time frame for re-letting is often less than 15 days.
