Summary

The fifteenth Annual Monaco Yacht Show is being held 21 to 24 September, and the Principality's hotels will be full.

And after an unusually difficult year the show will provide Monaco's estate agents with one last chance to make 2005 a success.

The annual yacht show in Monaco always guarantees Europe's second smallest country's hotels are full, and this year will be no exception. The show has grown in popularity over the fifteen years since it began, and this year will see Monaco's Port Hercules play host to over ninety of the world's finest yachts and five hundred of the world's best yachting companies.

The luxury yachting market has tripled in the last eight years, and helped along by orders from Russia's 'nouveau riche', the industry has seen an increase in orders of over a quarter in the last year alone.

But while luxury and Monaco are often associated, poor sales and a possible drop in property prices haven't been seen in the Prinicpality's real estate sector for over a decade.

Monaco Real Estate

In contrast to the highly successful Yacht Show, property sales in Monaco have been unusually slow in 2005. Although only a square mile in size there are over a hundred estate agencies battling for buyers to choose their services, and at times it seems that every third or fourth retail unit has been commandeered by a property company in Monte Carlo, the best known and most sought after area of Monaco.

According to Monte Carlo property specialist Henri Boulanger some estate agents are being squeezed, and are viewing the yacht show as the last opportunity to turn a dismal year into a good one.

'The yacht show attracts a wealthy clientele in considerable numbers, and the type of person who might be buying a luxury yacht might well be thinking about buying a property in Monaco as well.

While it wouldn't be etiquette to actively pursue buyers, many estate agents in Monaco are desperately hoping to see their doors open and for one or two potential buyers to call into their offices.

th good two bedroom apartments starting at over a million Euros, and penthouses with Mediterranean views often over five million and some of them over ten million, it can take just one sale to turn a bad year into a good one.'

Monaco's property price inflation has often risen by over ten per cent a year in the last decade, but a combination of events have conspired this year to see a possible stagnation in prices, and potentially even a fall.

The passing earlier this year of the popular Prince Rainier, Europe's longest reigning monarch, cast a cloud over the area which it is just emerging from, but economic factors have also played a significant role in the downturn of the real estate market.

The strength of the Euro against the American dollar has led many of our potential buyers from the US to delay their viewing visit from this year to next, and earlier this year another source of important buyers from the UK held back until after the election to see what the outcome would be', explains Henri, adding 'and now with the uncertainty of the economy after the recent tragedy of Hurricane Katrina it is quite possible that some US buyers will delay their visit even more'

Monaco Grand Prix

No surprise then that while the tourists will be in Monaco in the same and possibly increased numbers than last year, the prospect of several dozen potential property buyers descending upon Monaco and staying in her best hotels over a few days is seen as an opportunity not to be missed by the realtors.

But what is surprising perhaps is that the Yacht Show is viewed as a better opportunity than the Monaco Grand Prix for her realtors.

'The Grand Prix attracts tens of thousands of people to Monaco every May�', explains Henri, 'And every April we get a lot of new enquiries for property in Monaco, with the buyers asking to view apartments in Monte Carlo with views of the race circuit during the Monaco Grand Prix weekend. But what they don't realise is that many of the apartments for sale have been rented out for the weekend, and viewing is impossible.

Even if an apartment hasn't been rented out for corporate hospitality it would take all day to get from one apartment to another. The Grand Prix is a great tourist event for Monaco, and some of the estate agents go away for a few days. They won't be doing that during the Yacht Show!'.

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The fifteenth annual Monaco Yacht Show is being held this year from September 21 to 24. Full details can be found at www.monacoyachtshow.com , Monaco hotel details www.yourmonaco.com/hotels

For a guide including a Monaco map, Monaco weather, direct contact details for hotels in Monaco including the Hotel de Paris and Columbus hotels and the Monaco Grand Prix can be found at www.yourmonaco.com

Details of Monaco Real Estate can be sent upon request at www.monacoproperty.net

Spain and Portugal have suffered one of their worst droughts on record this summer, with consequences room empty swimming pools for the tourist to economic disaster for farmers losing their crops and livestock..

Roger Munns, Managing Director of Tribune Properties, predicts that property prices in the two European countries could drop as much as fifteen per cent in some areas as more owners decide to put their villas and apartments on the market.

'For many owners of second homes the original motivation to buy was to have somewhere they could spend time in a relaxing environment. Coupled with the thought of a good investment for the future, the market for overseas homes from buyers in the UK, Germany and Scandanavia has really taken off in the last twenty five years.

But soaring temperatures and a strain on the water supply could have consequences for their rental returns next year, which many owners rely on to meet their overseas mortgage.

Many holidaymakers want to rent a villa with a pool, but the attraction soon goes if the pool is empty. Some golf courses are having to cut down on watering their greens too, and it won't take a big fall in tourism to mean the difference between breaking even and not being able to meet the mortgage commitments for some overseas property owners.

This autumn could see more properties than usual being put on the market, with a consequential fall in prices'.

Early warning signs of a potential fall in property prices have already been seen on the Spanish Mediterranean island of Menorca, which has enjoyed better rainfall this year than the Spanish mainland and no water restrictions, but some villas being cut in price by over ten per cent.

Water restrictions on the mainland are having an impact on potential villa buyers, with many questioning the value of a swimming pool when they might not be able to use it.

Portugal has recently asked Spain for 6 million Euros in compensation, as water levels in the River Douro which runs through both countries fell below limits established in a bilateral agreement, with Portugal coming close to accusing her neighbour of stealing her water.

Good Time to Buy

'For anyone considering buying a property in Portugal or Spain, this September and October could be the ideal time to buy', say Tribune Properties. 'Unusually many properties were being reduced in price in August, traditionally a good month for sales.

We normally see villa and apartment prices being dropped mid September onwards when the tourists and potential buyers are thinner on the ground as some owners are keen to sell and don't want to wait until the following Easter before having a real chance of selling again.'

The drought isn't the sole cause of property prices falling add Tribune Properties, saying it has accelerated price falls and come on top of an already poor year for many estate agents in Europe.

'A good barometer for European property are the tax havens of Monaco and Andorra which don't rely on 'tourist' buyers, but usually have a steady supply of buyers interested in taking advantage of the zero income tax rate. Andorra is in the Pyrenees and has no water supply problem but estate agents were twiddling their thumbs this summer waiting for buyers to to show and they didn't.

Monaco similarly has had no water supply problems, but has also seen a lack of buyers. The tourists are still visiting the Principality and hotels in Monaco and Monte Carlo have been as busy as ever, but again there is a lack of serious property buyers, and negative property inflation is quite possible in Monaco this year for the first time in a decade.

With more property available on the market we would suggest buyers draw up a list of three or four villas they have viewed and liked, and then suggesting to the owners that they would consider buying at fifteen per cent below the advertised asking price to see which ones are prepared to consider it.'

Sea Water

One possible answer to secure the long term tourist trade and consequential property market is to follow Malta's example of building desaliniation plants, converting sea water to drinking water, sometimes known as 'reverse osmosis'.

The Mediterranean island competes with Portugal and Spain for the attention of second home buyers, and has a healthy tourist industry despite having no rivers and low rainfall, allowing the island to function normally even in drought conditions.

The water from this source can be used for agriculture and ensuring adequate reserves to fight forest fires for example - it might just be the answer too for the swimming pools and golf courses and would allow a plentiful supply of high quality for domestic use'.

For details of property for sale on the Spanish island of Menorca visit www.propertymenorca.com and www.menorcaproperty.info, for property and real estate for sale in Malta www.maltaproperty.info and for real estate in Andorra www.propertyandorra.com, real estate details for Monte Carlo and Monaco can be found at http://www.monacoproperty.net

The death of Europe's longest reigning monarch, Prince Rainier of Monaco, has cast a shadow over one of the world' most expensive property markets.

When Prince Rainier took power in 1949 the tiny Principality which is smaller than New York's Central Park was little more than a backwater whose image was one of a bygone era.

But instead of allowing Monaco to lose her independence and become part of France, Prince Rainier built the
world's second smallest country into its best known tax haven with property prices to match.

The Monaco of today is barely recognisable from the Monaco the Prince inherited, reclaiming land from the Mediterranean that added 20 per cent to her size, promoting Monaco as a millionaire's playground and allowing several new property developments.

Slower Sales

Consistent demand over recent years has led to over a hundred estate agencies in less than a square mile offering their services to those with the money to buy in the tax haven.

But sales this year have slowed. Monaco property sales so far this year have been a lot slower than in recent years, while the rental market has remained busy according to Henri Boulanger of Monaco's Tribune Properties, adding that the increase in Monaco's property prices seen in recent years won't be repeated for this year at least.

Prices start from 350,000 Euros for a small 28m2 fourth floor studio on the Boulevard d'Italie, rising to 5,000,000 Euros for a three bedroom apartment with Mediterranean views in Monte Carlo, to over 15,000,000 Euros for the best apartments.

For details of apartments for sale and rent in Monaco visit www.propertymonaco.com

Euro Tax Haven Threat

Media reporting of a new EU savings tax directive has left many people wondering whether European tax havens could soon become obselete.

The July directive requires banks throughout Europe, including low and no tax areas such as Gibraltar, Monaco, Malta and Andorra, to disclose bank account owner information to their home country's tax authority.

But Roger Munns, Managing Director of tax haven property specialists Tribune Properties, says that some of the reporting has been less than accurate.

'The purpose behind this directive is primarily aimed at those who hold illicit funds, such as drug dealers, who will need to look outside of the European banking system to place large cash deposits. The main attraction of Monaco and Andorra is the zero per cent income and inheritance taxes, and this remains intact and there are no plans whatsoever to change this.'

Monaco and Andorra have long been favoured destinations for the well to do, but with new technology allowing businessmen and women to run their offices from anywhere in the world, operating from low tax bases has seen added interest for Europe's primary tax havens, doubling property prices in the last ten years.

Both Monaco and Andorra are outside the EU, and their signing of the directive voluntarily is often overlooked in the media's analysis of any effects on the two small countries long term popularity.

Property prices have risen steadily over the last decade, often topping ten per cent a year, but this year has seen a slow down of that increase.

Property Price Uncertainty

Both Monaco and Andorra's property prices have seen a levelling off this year, according to Tribune Properties, but say this can be explained by factors other than the new EU directive.

Tribune say that in Monaco the passing of Prince Rainier earlier this year cast a shadow over the Principality, while in Andorra the local market has slowed as Andorrans struggle to keep up with the price of property, fuelled by buyers from around the world seeking residency.

Two other factors have contributed to the slow down in the first half of the year which could be reversed in the second half the absence of UK buyers awaiting the outcome of their election in May which saw the Labour Government returned for a historic third term with Tony Blair as Prime Minister and possible tax rises in the pipeline, and buyers holding US dollars who were hit by the rise in value of the Euro? which has now peaked following the EU Constitution 'No' votes in France and The Netherlands in June.

Both Andorra and Monaco require new residents to live there for six months a year to maintain their residency (but Andorra doesn't police this once residency is granted). Andorra property prices start from just over 200,000 Euros for a one bedroom apartment, while Monaco is more expensive with one bedroom apartments from around 600,000 Euros.

Tribune Properties offer details of properties for sale in both Andorra and Monaco. For Andorra property visit http://www.propertyandorra.com , for property and real estate in Monaco and Monte Carlo http://www.monacoproperty.net

Tribune also offer to e-mail current property for sale in Malta at http://www.maltaproperty.info and property in Menorca at http://www.menorcaproperty.info