Home to many of Europe's top businessmen and women, residents benefit from an absence of income tax as well as close proximity to the French Riveria, Italy, and a short flight away from the United Kingdom and Germany.

The lack of new apartment buildings in Monaco has only hastened the rise of property values at a time when residency is increasingly in demand.

The number of Britons moving to the principality is thought to have doubled in the last two years from 1500 to 3000 now.

The lack of new homes in Monaco surprises many would be buyers as they can clearly see construction work being undertaken, but the new apartment buildings are for locals and key workers rather than new incoming residents.

The lowest priced property on the market at the moment is a 30m2 studio with a 7m2 balcony in the Fontvieille district at 720,000 Euros. With closing costs this rises to over 800,000 Euros.

Mid range is a 210m2 3 bedroom 2 bathroom apartment in Monte Carlo, close to Casino Square, at 4,200,000 Euros.

And at the top end is a three floor penthouse apartment in the well known Eden Star development at 25,000,000 Euros.

Future Trends

Traditional rules of supply and demand in the real estate market are likely to see Monaco property prices rise further in the short and medium term, according to one Monaco property specialist.

With one bedroom apartments in the Principality already at the million Euro level, the lack of properties coming to the market and the absence of new builds could make today's prices seem like a bargain in five years time.

'Three years ago there were six hundred properties on the market', they claim, 'Now there are two hundred. Coupled with increased demand, especially from the UK, prices have been rising and could go quite a bit further if current trends continue.'

Visitors to Monaco and Monte Carlo are often surprised at the lack of apartments for sale as they can see new buildings under construction.

'The apartment buildings under construction are for local Monaco people', they explain, 'Rather than for the open market where anyone can buy a property. The situation is unlikely to improve in the short and medium term but the number of buyers is rising - and consequently so are the prices. Monaco now has the highest priced property in Europe.'

Other reasons for the shortage of property in Monaco include that residents are holding on to their apartments longer, enjoying the tax free status Monaco affords, and as the owners see their property rising in value holding on to it as an investment.

To maintain residency in Monaco, residents need to live in the principality for six months a year. Winter time often sees a lot of apartments mothballed with the owners wintering in the Caribbean.