Property loans in Monaco? In view of the clientele and the assets concerned, they are obviously of a rather special nature.
The explosion of the American property bubble: a consequence of the economic and financial crisis? The Principality will not follow the same route. Banks receive requests for property loans from clients in four distinct markets - the French Riviera, the French Alps (Megève and Courchevel 1850), the finest districts of Paris, and the London Super Prime - concerning residential properties worth at least five million euros. The recent crises have had little impact on this market. This is of course not the case everywhere, but in some areas at least the prices of some properties have even risen.
The logic of optimization
On the buyers' side this prestige market is boosted by international demand and buyers who do not necessarily need to make up a capital deficit. In most cases, though, property loans remain the operations that enable banks to contact a prospect. In this type of market the duration of the loan is often relatively short, 5 to 7 years on average. Depending on each client's situation, banks strive to produce a tailor-made solution, adapting interest rates and duration as required. Once agreement is reached with the new client the financial establishment opens its balance sheet so as to propose taking over management of some or all of the client's assets, in the context of a more global Asset/ Liability approach. Rather than tying up capital in the acquisition so as to obtain a loan, the client can guarantee the credit with a sum considered as a deposit. The aim aim is to adapt to the client's particular needs as part of an estate-optimization approach. Clients now give priority to a prudential attitude to management. On another level, we also note the fears of foreign investors concerning the tax implications of a property acquisition in France. It's the impression of uncertainty linked to their current instability rather than the level of taxes themselves that can cause concern. The current level of interest rates allows borrowers to benefit from an undoubted leverage effect. Banks noted renewed interest in recent months for prestige properties, always seen as a safe-haven investment by wealthy purchasers.
