The rental market in Monaco has its unique characteristics that potential investors should understand before diving in. From prices to profitability, here’s what you need to know.
Rental yield around 2% in Monaco
In the Monégasque market, rental yields are relatively low, hovering around 2%. However, it’s crucial to note that this yield is net of taxes, except for French tax residents. “What’s important to remember is that the primary investment argument in Monaco has never been rental yield, but rather capital appreciation. And in this respect, Monaco has no competition in the Eurozone,” explains Florian Valeri, director of Valeri Agency. Recent trends show that prices have tended to stagnate over the past two or three years. However, looking back over the last 20 years reveals an average capital appreciation of about 5% per year. When this appreciation is combined with the 2% rental yield, it results in an overall return of approximately 7% per year. This sentiment is echoed by Gilles Graille, head of Pacific Agency: “One shouldn’t focus solely on rental yield. In Monaco, the profitability of real estate is significant. In just ten years, property values in Monaco have surged. That’s where the true yield lies.” Another aspect to consider, according to professionals, is that despite being real estate, these assets remain liquid compared to other markets. Furthermore, they are nearly guaranteed since the Principality is a niche and tax-free market.
Inflation : a surge in rental prices?
Rental prices in the Principality have evidently experienced a significant jump. According to the professionals surveyed, a studio in Monaco currently rents for between €2,000 and €3,500 per month. For a one-bedroom apartment, prices range from €3,500 to €6,000. The three-bedroom units, which are currently the most sought after, have seen prices soar. “Just over a year ago, three-bedroom apartments could still be found for between €6,000 and €8,000 per month. Today, prices quickly reach €10,000,” note the real estate agents interviewed. As for four-bedroom units and larger, they start at €15,000 per month.
Is it possible to negotiate rent in Monaco?
According to the professionals consulted, in the current context of property scarcity, negotiating rental prices is risky. With demand outstripping supply, landlords are in a strong position. Therefore, it is advisable to avoid attempting negotiations if one wishes to secure housing.
