Prices in Monaco historically remained stable, with relatively small percentage increases over the past couple of years for Prime and also super-prime properties. What’s happening now, or what’s not happening is a waiting game, who have property to sell can wait and who searching for something to buy, or waiting to see what will happen with prices, however, buyers will also want to be ready to make an offer. And of course, that sometimes includes having a mortgage in place, We know that a lot of prime and super prime deals involve cash buyers, but the current low interest rates must also be very attractive for ultra-wealthy clients…
Michele Tecchia : Does the mortgage landscape like for that part of the world?
I think the first is the cash buyer piece or near cash by piece in any prime or super prime market to be able to transact quickly is of course important. And it’s even more important today. And there are various ways that that can be structured doesn’t have to necessarily be cash. I think the second thing is really around the interest rate demand so there are opportunities and advantages to leveraging an asset of course that’s because it allows you to buy it In the first instance, but of course, it could also be that it allows you to buy something bigger or have a more important location or whatever it might be that’s driving that particular property decision. But of course, there are other considerations when leveraging, which include perhaps some local tax thinking are awesome diversification.
All of those are important, both in this market and as a high net worth individual. And I guess the last thing is that kind of local expertise. So Barclays has a significant footprint in Monaco, and that spans across the French Riviera in terms of influence. And the important aspect, there is our ability to not only leverage, I guess, what is a hub in London, for international clients, but to connect them with Barclays locally in Monaco, and that allows international buyers wanting to get into the marketplace, a really clear way of being able to engage. And that’s important, especially if you’re entering a foreign market that’s not familiar.
The very low interest rates are of great interest to buyers looking to borrow. Let’s see how the current negative interest environment affects lending. The theory behind negative interest rates is ultimately as we know, to boost the economy, your spending and your financin And that includes, of course, increase activity in the housing market. Our clients are savvy, and a good deal at five to 10 million euro plus level can be very be very significant. However, I would say that right now, we are also seeing a lot refinancing. In refinancing to help them coming out of fixed annuities to diversify their portfolio across you know, real estate and liquid assets for worse optimization. For instance. This means greater diversification in terms of liquid assets, and more interest in commercial property or could be shops and offices.
But let’s get back to the residential side of things. From some of the conversations I’ve had recently, it sounds like demand for the best properties in good locations. So that’s properties that have great views and are ready to move straight into that it’s far outstripping the availability of good stock. Do clients managing to find their perfect properties? They’re the ones that tick all these boxes?
They there are certainly enough choice in the market currently, for people to be able to find what they want. All be it, what they ended up buying very often looks very different to what they set out to buy in the first place. It very much is a an educational process with a lot of these clients who may have started looking three or four years ago, and now really are reassessing what their needs are today. And reassessing how much time they’re actually going to be able to or will be able to or want to spend in those properties. And that is something really that is being facilitated by the use of technology. And we obviously talk a lot about well being and security. But the technology that we have at the moment is something that really hadn’t been properly tested before. So it really is a wider consideration. Yes, there’s the health. Yes, there’s the space consideration there. And there are some amazing properties that are for sale. And in terms of people starting looking at one thing and then moving on to something else. It’s a great example.
Michele Tecchia : We have a lot of client recently who said I want to be in Monaco , which is very often where people start.
They then realized that actually for their money, which was 20, 30 million euros, actually, they weren’t able to get everything that they wanted, which at that price usually means a separate dwelling of some kind, whether it’s a granny annex, whether it’s for active for extra family or whether it’s for staff. We then took them just a little bit down the Riviera to Villa rock flurry, which is a house that was famously owned by Sean Connery, which has had huge coverage over the course of the summer and lots of interest and multiple bids. And they said okay, well actually, funnily enough, we’ve got three times as much land, we’ve got the main villa, and then two separate individual villas. And the view is still fantastic. But there was an educational process. And that particular client couldn’t get their head around the location which still has that reputation of being one of the number one addresses in all of France, and particularly as the most expensive address in France and on the Riviera.