Prices have risen consistently in recent years, to the point where it overtook London early in 2007 to become the most expensive location in the world for real estate, with London overtaking Monaco again recently.

The studio is just 43m2 in size with a 15m2 terrace, and located in Jardin Exotique, an area of Monaco that becomes behind better known Monte Carlo and Fontvieille in popularity for potential Monaco property buyers.

Monte Carlo has traditionally been the first area most people ask for as it is so well known, while Fontvieille, which has its own harbour and hosts the annual Monaco Yacht Show is popular among business people as the heliport is based there.

Jardin Exotique is the highest area in Monaco, and most apartments enjoy good Mediterranean views.

Monaco is due to invest heavily in Jardin Exotique's infrastructure in the near future, making property there attractive to investors looking for property appreciation. Overall, it is possible that Monaco property prices could overtake London again in the coming months.

Monaco property prices are almost certain to rise in the short and medium term according to a Monaco travel guide, and possibly to the level where the cost per square foot will exceed that of London.

'Three years ago there were around six hundred properties to rent or buy in Monaco - that has declined since then to two hundred - but demand is as high as ever, pushing prices up more.', explain the travel guide.

With property prices in Monaco the second highest in Europe and one bedroom apartments after closing costs starting at around a million Euros, longer term the shortage of property in Monaco will be helped a new island being built off Monte Carlo.

It's thought unlikely that the new island will reduce prices much overall though, despite the increase in the number of property units available as Monaco property is always in demand.

Monaco property specialists believe that most new apartments will be sold to investors off plan well in advance of any building work starting.

'The problem with property in Monaco is not the lack of buyers', they say, 'but more the lack of good properties for buyers to choose from. Hopefully the new island will address that. Everyone in Monaco is aware of how important the environment is thanks to Prince Albert's initiatives in pushing it up the political agenda, and any new developments will be low rise. With the good weather in Monaco expect to see plenty of solar panels on the roofs to make the buildings energy efficient'.

It is possible that the new island will be incorporated into future Monaco Grand Prix, which could give more overtaking opportunities.

One Monaco property company reports that new enquiries are running at a high rate, with many buyers keen to buy now in case prices go up more, either for residency, or more commonly than before for investment.

In recent years the UK market has accounted for much of Monaco's property price rises, as the number of buyers has increased to 40 per cent of the total market, but in recent months buyers from other European countries and from further afield, Australia and Canada in particular have been noticeable.