Despite a strong year statistically for real estate in Monaco, the Principality has been overshadowed by luxury destinations just over the border in France, according to the fresh-off-the-press 2023 Wealth Report from Knight Frank.
Global real estate consultancy group Knight Frank has just published its 2023 Wealth Report and it’s full of surprises, particularly within the Prime International Residential Index, which tracks the annual performance of prime prices across 100 of the world’s most desirable destinations.
It’s an interesting read. 2021 is considered something of an “anomaly” characterised by “stellar price growth as markets reopened post-Covid, and revenge spending took hold”, writes the group’s Kate Everett-Allen.
“Off the back of such a boom, you might be forgiven for thinking 2022 would see a return to business as usual. Far from it,” she continues. “Omit 2021, and 2022 posted the highest level of prime price growth on an annual basis (5.2%) since the global financial crisis.”
Investments tapered off in the latter half of the year as inflation rose, the cost of debt increased, recessions were forecast and markets “went wobbly”, but even so, nearly 20% of the world’s ultra-wealthy added to their property portfolios in 2022, while 15% plan to do so in 2023.
Monaco holds on to its title as the world’s “most expensive residential market”, but…
Monaco retained its title as the world’s most expensive residential real estate market, but it was among just a handful of Knight Frank’s Top 100 to experience a fall in prime price performance in 2022.
Compared to the previous year, Monaco fell by 3.8%, leaving it in 92nd position in the rankings. The Principality now sits alongside a number of cities that saw the strongest price growth during the Covid pandemic but are now experiencing decline, such as Seoul (-5%), Vancouver (-7%), Stockholm (-8%) and the two New Zealand hotspots of Auckland (-19%) and Wellington (-24%).
South of France experiences a year of “no let-up in enquiries”
The same can’t be said for the south of France, however, which has performed spectacularly well in the rankings. Provence now finds itself in 12th position with a 12% increase, Cannes is in 17th with a 10% rise, Saint Tropez is in 22nd thanks to 9% of prime price growth, and Saint Jean Cap Ferrat is just behind in 26th with 8%.
Knight Frank’s Head of International Sales has described 2022 as a year with “no let-up in enquiries” for property in the region.
This is expected to continue into 2023, with France featuring in Top Five overseas markets likely to attract property investments from ultra-high-net-worth-individuals (UHNWIs).
“The wealthy are targeting markets offering lifestyle benefits along with currency diversification, stable political governance and high levels of transparency,” according to the group’s Wealth Report Attitudes Survey.
The era of the “resort” destination
One clear winner in the Prime International Residential Index is the resort.
“Dubai leads for the second year running, cementing its status as a second home hub for global UHNWIs,” writes Everett-Allen.
In 2022, it recorded a stunning 44.2% growth in prime prices, although the report is keen to point out that “values are rising from a low base”.
The next in the rankings is US ski favourite Aspen in Colorado, with saw a 27.6% rise. Riyadh comes in a close third with a 25% increase.
“In 2022, resorts shone bright, be they sun or ski locations,” summarises the 2023 Wealth Report.
Photo source: Sébastien Jermer for Unsplash