Why are renovations so expensive in Monaco ?
This is the first of a series of posts that we will be publishing explaining and exploring various topics related to renovating properties in Monaco. It seems only fitting that we start with the one question I have been asked the most in the last 20 years…
Why are renovations so expensive in Monaco?
To fully understand this we need to appreciate that Monaco is a property supply-constrained market.
The key point here is ‘supply-constrained’, not only in terms of the properties available but also the number of businesses, contractors, designers and companies who service the renovation market and are AUTHORISED to work in the Principality. Non Monegasque companies require an authorisation from the Government and must notify the Business Development Agency. They are requested to submit an application and obtain approval from the Administration before any work can commence
General Building Contractors also includes technical trades, electrics, plumbing HVAC etc.
In calculating the cost of a renovation the following overheads need to be incorporated into the contractors price;
- Cost of administration including insurances.
- Operating costs, vehicles, waste disposal etc.
- Limited / difficult access
- Staffing costs (including relatively high social charges)
- Limited working hours (Hours available to work in most buildings. 9.00 – 12.00 and 14.00 – 17.00. 6 hrs on average per day.)
- Limited working days (No works on Saturdays unless with specific authorisations.)
- Limited working months (No works in most buildings during the month of August, some residences also include July.)
Therefore when compared to European counterparts, you effectively have a 4 day work week and an 11 month year. Which extends the lead time, reducing working efficiency and as a result increases the builders costs.
Material costs can be higher as the majority of materials may need to be bought in from outside of Monaco. The physical size of monaco means that most suppliers will hold limited standard stock only. These increased transportation costs, delivery lead times and administration costs need to be factored in.
Professional fees and costs
Monaco consists mainly of apartment blocks. Each of these will all have a ‘Syndic’ tasked with the administration of that building. Part of their administrative duties will include the granting of authorisations to carry out works.
When undergoing major re-structuring you will need a Monaco Urbanism authorisation (building permit) and a Monagasque Architect as well as permission from the Syndic.
The Syndic may impose further requirements upon you.
- Huisseur (Bailiff) to record the condition of surrounding apartments and common areas and recording the display of the Building permit on the work site.
- Bureau of Control. Compliance office that is an external organisation paid for by you that oversees the construction methodology and gives their recommendations and technical advice.
- Bureau d’etude (technical study). This could be for example structural engineers, electrical, heating & ventilation.
- Assitant Maitre d’Ouvrage. Client representative who deals with all trades and service providers on behalf click here of client.
- Technical controller. He works on behalf of the Co-property to ensure that all works especially where they impact the common parts, water, electricity, ventilation etc. are done in accordance with the building rules.
- Global Chantier Insurance. Unlike France there is no 10 year Guarantee (garantie decinal) in Monaco. You will need to subscribe to a further Global Chantier Insurance that covers the works for 10 years.
- Toute Risque Chantier Insurance. An additional insurance that covers the works during the building phase.
You need to budget around 15% of the total build costs for Professional fees and design services. It is good practice to have a trusted project manager to ensure that all these requirements and contractors are managed. The project manager will not only control lead times, deliveries, quality but more importantly costs. A good project manager will save you more money than they cost. Not forgetting, time, stress, languages and regulations.
Changes to scope of works
One more element which invariably impacts the build cost (and lead time) significantly is changes to scope of works.
It is absolutely essential that before any works can even be quoted you have a full scope of works document. If the project is detailed completely from A – Z then you are well ahead of the dreaded cost creep. This will mean that all contractors are quoting like for like. This makes it easier to negotiate and avoids hidden surprises.
A benefit of employing an interior designer is that they will provide you with the designs showing the final finished look. This design can be used by a good project manager to create a detailed scope of works for accurate quoting purposes and a work schedule to be formulated.
The timing of changes is time sensitive. When they are made may impact the cost and lead time extensively.
Unforeseen additional works are difficult to factor in. A project manager will build in some contingency for some instances. These are difficult to predict, they could be discovering hidden pipework during the demolition phase, or uncovering hidden damp which will need additional treatment.
Building costs can be high in Monaco due to the above mentioned reasons. This should not deter you from taking on a project as these costs apply to every project.
What is critically important and the only way to control costs and ensure the results are as you specified is that you have a detailed design package, a detailed scope of works and a realistic budget for your project. Together with the right advice and guidance you will be able to achieve your renovation goals.
Monaco Projects have over 20 years of experience renovating properties, dealing and managing the contractors, government, budgets, lead times and delivering results.
Please get in touch if you would like some advice on your property project plans.