2024 is set to be a year of high stakes elections around the world, continuing warfare and strife, encouraging some UHNW families to consider safe havens for their residency.
In this context what are the respective merits of the Geneva and Monaco residential property markets? Capital flows into Swiss and Monagasque banks have increased significantly recently as well as into their respective real estate markets where demand exceeds supply and values remain firm, more than holding their own while many other major markets are weakening. These are the essence of economic and political safe havens.
The fiscal advantages of both are a major factor for potential buyers although lifestyle and other opportunities are just as important for many families.
If, for example, a move away from London is envisaged, day to day happiness, something that has great value but no price, must surely also be a consideration.
GENEVA:
Property market:
The overriding characteristic is high demand and relatively limited supply. International interest is significant. Geneva and environs remain a ‘blue chip’ safe haven destination, with good houses, particularly sought after by or near the lake. Geneva itself is hugely diverse with a non-Swiss population of 30%. Quality apartments in town sell for between CHF 15k and 20k per m2 while the best apartments on the lake sell for more than 30k per m2. Land with a good lake view is rare, selling for CHF 4k per m2. Offsetting these high prices are Swiss mortgages e.g. 10 year fixed at under 2%.
Economy and politics:
In 2022 inflation peaked in Switzerland at under 3%, due to sound macroeconomic policies and the impact of intelligent decisions taken decades ago. For example, unemployment insurance is not funded by the State but works as an insurance policy where all active employees pay a monthly premium to fund the program, private health insurance is obligatory so the cost to the state is greatly reduced, and the system of direct democracy calls for referendums on important issues.
Political parties are strongly encouraged to “compromise”, helping long term stability. Directionally correct decisions are made irrespective of party politics and with a long-term achievable goal in mind.
Accessibility:
Geneva is very well connected. There is no impediment to business travel to destinations of significance, by air to all of Europe as well as the USA, Washington, Asia and further afield, and by trains connected to major European hubs. Motorways are equally impressive and in excellent condition.
Education:
Education is another reason to consider Geneva as a destination.
The Swiss system is very good and Geneva also has many excellent private schools, such as ECOLINT, the College du Leman and the English School of Geneva. University education is also very well served in the Swiss Romande area.
Business:
Switzerland has ranked first in the Global Innovation index for the last 12 years. There is a world class ecosystem for startup companies, an attractive corporate tax system, a predictable and relatively efficient legal system, and an economic roadmap that allows for long term investments.
Many multinational corporations have their regional headquarters here.
Lifestyle:
Geneva is all about work and lifestyle balance.
In the heart of Europe and with easy access to all major cities, it is an easy drive to world class skiing areas in Switzerland and France, great sailing in Lac Leman where the largest inland lake regatta in the world is hosted. There is a strong international scene with foreigners playing an important part in community life, a buzzing classical music scene and, most importantly, a host of wonderful restaurants to choose from … all this makes Geneva a safe and fun environment to live, learn and work.
MONACO
Property market:
Demand outstrips supply and the sales figures for 2023 look robust. The market report due in February will certainly show similar transaction levels and pricing to 2022, making Monaco the most expensive place to buy in the world with an average price per m² of over €50,000. New build demand especially remains strong with the land reclamation project, Mareterra, sold out and re-sales at well over €100,000 per m². Purchasers are less reliant on bank financing than in other jurisdictions.
Economy and politics – monarchy:
Legislative power resides with the Prince and the National Council. General elections in 2023 resulted in a landslide victory for the Monegasque National Union, a centre right party.
The Monaco political system is as hugely stable: dramatic changes are rare in any sector, least of all to Monaco’s benign tax regime.
Accessibility:
Nice airport, the third busiest airport in France, is 30 minutes away, serving all of Europe, the USA, Asia and elsewhere. There are around 10 daily flights out of Nice to London. Trains are equally well connected to all major European hubs. Motorway are impressive and are in good condition.
Education:
Monaco offers a number of French and international educational options to its residents, including conventional schooling alongside the bespoke Modelex Education Academic Centre, which provides bespoke academic programs for families – especially those entering and leaving Monaco. Educational Institutions are divided into State, private and independent institutions. Schools include a French speaking private school, an independent co-ed private school which offers the IB diploma programme, and the recently created British School of Monaco, which offers a 100% English curriculum.
Business:
The government has an international outlook and welcomes foreign investors and business people who wish to operate in the Principality. Starting a business in Monaco is made relatively easy. It is very definitely possible for foreigners to start a business in Monaco. The biggest majority of business owners are foreigners. It’s important to know that in order for a foreigner to open a business in the Principality, he or she has to buy or rent a property in Monaco.
Lifestyle:
Monaco is an excellent choice for people wishing to reside in a sophisticated but human-size city state with easy access to the rest of Europe. The climate is exceptional with over 300 days of sun per year. There are excellent cultural and sporting events all year round including the Grand Prix, an international tennis tournament, the impressive September Yacht Show, and many more. Ski resorts are within easy reach from around 90mins drive away. Small – a square mile in size and with only around 38,000 residents, Monaco punches well above its weight in terms of lifestyle and there are few destinations in Europe which can rival its mix of Mediterranean glamour and accessibility to business hubs such as London.