The Swiss city of Geneva and the principality of Monaco have long attracted the world’s super-rich as tax-friendly money shelters in envi-able locations. Yet since last year’s eruption in the world financial markets and the dark consequences that have flowed from that, these two great tax cities have very different tales to tell.

Geneva has long been the high-end hub through which the world’s business community and winter-sports fanatics pass, lugging laptops or skis (and often both). Its attractions are clear. In under an hour’s drive, you can be soaking up the splendour of the Alps, where hundreds have bought secondary residences in the past five years. Others relocate and want a primary residence in this small but perfectly formed A-List European city.

According to Sergio Martinez of Aylesford International’s Geneva office, the city remains top of many an ultra-high-net-worther’s wish list a fact that bears testimony to Switz-erland’s reputation as a pecuniary safe haven. ‘Every time there’s a crisis in the world, the money comes to Switzerland,’ says Mr Martinez, adding that there has been a veritable flood of enquiries since the UK Treasury’s announcement, later retracted, that it planned to tax British ‘non-doms’. ‘Most high-net-worth individuals relocating to Geneva do so for tax reasons.’

Despite, or perhaps because of, the world financial crisis, demand for property and prices continues to grow. Recent research by Savills found that, nationally, sales prices in Switzerland have grown annually by 4% since 2000, including 2008, and the Lake Geneva area has experienced double that at 8%, at a time when house prices in much of Europe have fallen by about 30%. This despite the fact that foreigners need to become Swiss citizens to buy property there. Much of the growth is driven by English money, according to Mr Martinez.

British buyers include David Adams, head of residential sales and lettings for Chesterton Humberts, who acquired a house on the shores of Lake Geneva. ‘Traditionally, the Swiss franc is a safe haven,’ he says. ‘It’s the one place in western continental Europe where you’re not involved with the Euro. And people in the financial industry are moving in droves to Switzerland because of concerns about higher taxes in the UK.’

From Geneva airport, you can reach Paris, Munich, Milan or Barcelona in under an hour. London City Airport isn’t much farther, making the trip almost as commutable as from the Home Counties. Above all, Geneva possesses an attribute that rich individuals increasingly covet absolute privacy, anonymity and discretion about wealth rather than unseemly displays of it.

The only problem is finding a suitable home. Housing stock in Geneva City comprises predominantly apartments, a quarter (24.7%) are one-room units, compared to just 8.2% with five or more rooms, according to Savills Research. Chesterton Humberts say apartment prices start from about €400,000.

Intensifying demand for high-quality homes in the most desirable areas, such as the old town and overlooking the lake at Cologny, is the fact that they come onto the market infrequently. At Cologny, you tend to find modestly sized and proportioned homes in an almost country-cottage style, despite an average price around €20 million. Even Lewis Hamilton, who moved here in 2007, lives in a fairly unremarkable-looking apart-ment building albeit overlooking the glistening blue waters of Lake Geneva.

By contrast, Monaco, which might be likened to a glamorous, suntanned sister city to modest Geneva, has long been a tremendous paparazzi photo opportunity as much as a tax shelter. Those who live there espouse other charms, namely security, healthcare, education and, of course, the many advantages of inhabiting a stretch of the Côte d’Azur whose allure is captured in a thousand picture-postcards. Yet as a city more about relaxing than working, without a true financial or business district, Monaco has taken a something of a hit in the past few months. Agents say up to 30% has come off house prices.

‘Monaco hasn’t been spared from the rigours of what’s been going on in the rest of the world,’ says real-estate broker Irene Luke at Lorenza von Stein Worldwide Realty. ‘The bubble here has burst, and although there are people still coming in to buy, they aren’t prepared to pay massively over the odds just to be in Monaco.’ That said, the recently published Knight Frank Wealth Report put Monaco first ahead of London and New York in terms of real estate, with an average price of €50,000 per square metre, making it the world’s most expensive city.

Mrs Luke attributes the downturn in the principality to a combination of factors, from the falling-off of Russian buyers, to people badly hit by the stock exchange divesting themselves of their assets, to speculators being forced to sell. ‘There was a big speculative market in Monaco a year ago, with people buying apartments and renovating them, then putting them back on the market in order to make a profit.’

Mrs Luke reckons that she has at least a third as many properties for sale now than she did a year ago good news for agents and potential buyers. ‘As agents, we’re enjoying it, because at least we have products to offer, whereas last year, we had nothing to offer at all.’ Similarly, Caroline Olds Gabison from Prime Property (working with Burger-Sotheby’s International Realty), states that 20%–30% has been shaved off Monaco house prices in some cases, even more.

‘Today, you can pick up a one-bedroom starting from around €1.2 million that would have cost closer to €1.8 million at the height of the boom,’ she explains.  One penthouse apartment originally marketed at €22 million has now come down to €14.5 million. Mrs Olds Gabison reckons that such price reductions and an uncharacteristically high and varied supply of properties on the
market, such as four- and five-bedroom apartments that were rare as hens’ teeth during the boom, makes this a good time to buy.

Paul Humphreys, head of the French desk at Knight Frank, is equally optimistic. ‘Because of its unique position, its taxation environment and what it offers in terms of lifestyle, Monaco represents a very good price per square metre and a great investment for the future. It has always attracted wealthy people, and in the long term, that’s not going to change.’