A combination of its small size and a friendly tax regime that attracts the world’s wealthiest individual s to its shores has made the principality of Monaco the world’s most expensive luxury property market, topping the likes of Hong Kong, New York, London and Paris, according to Savills. A home in the tiny kingdom on the Mediterranean Sea cost an average 48,150 euros (US$54,010) per square metre as of the end of 2019, or 7.7 per cent higher than in Hong Kong and almost double the level in New York, it said. For another yardstick, US$1 million could buy 16 square metres (172 sq ft) of prime property in Monaco, versus 21 sq m in Hong Kong, another property consultancy Knight Frank reported in March. Save for Vatican City, Monaco’s 2.1 square kilometres make it the world’s smallest state, severely constraining the property supply . Its size is even smaller than the 3.41 square kilometres of Central Park in New York. Its zero-tax policy on personal income, investments and capital gains are irresistible magnet for celebrities and the ultra-wealthy. “We expect Monaco’s real estate to continue to perform well,” said Edward de Mallet Morgan, a partner at Knight Frank. “Generally, if there are global slowdowns in the market, there is some flight to perceived safe havens. Monaco, as the most expensive real estate market in the world, seems to hold up well during tough economic times.” Bordered by France and Italy, and famous for being the adopted home of famed Hollywood actress Grace Kelly after marrying Prince Rainier III in 1956, the small European monarchy is currently home to the likes of tennis stars Novak Djokovic and Caroline Wozniacki, and F1 champions Lewis Hamilton and Nico Rosberg. As of 2018, per capita income of a Monegasque, or an inhabitant of Monaco, was US$186,000 – among the highest in the world. The principality’s temperate climate, with 300 sunny days a year, is another drawcard. The country also hosts glitzy events such as the Monaco Yacht Show and Formula One’s Monaco Grand Prix. Monaco’s economy is largely supported by service industries, including finance, insurance and tourism. “Even in a country as small as Monaco, living there remains a unique experience. The Monte Carlo Golden Square is popular with very wealthy people,” said Thierry Rolland, director at Coldwell Banker Cobalym Properties, based in Lyon, France. “Living in the Golden Square is a symbol of a person’s status but also a good financial investment because of the limited supply.” Over the last 10 years, the price growth of property in the principality was estimated to be between 44.5 per cent and 107.4 per cent, according to Savills. Annual rental values rose by 20 per cent across all property types in February. Reselling a piece of property could take a few months to a few years, depending on the pricing, according to Rolland. But that is not always the case, according to Irene Luke, head of Savills Monaco. “Where the asking price is correct and a willing buyer is found, we have completed transactions in less than one week,” she said. With newly built properties coming on stream, agents expect more interest from Asia. There is certainly increased interest from Asian buyers, Knight Frank’s de Mallet Morgan said. Many of them of them have invested in London first, but then look to other locations that make sense, he added. “There is a perception that if Asians are being advised to buy in a low-tax-threshold location, they want somewhere that provides the fun and lifestyle benefits they want, and Monaco currently seems to be coming out as the favoured location.” Given their familiarity with Monaco and the whole of French Riviera, as well as its reputation as a safe and secure place, “it is reasonable to expect a degree of interest from Hongkongers for property in Monaco”, according to Tung Chee-chen, Monaco’s honorary consul to Hong Kong.