Correct me if I'm wrong but I heard that for Monaco nationals, housing is heavily subsidized. Otherwise they simply wouldn't be able to live in their own country!

I personally know a Monaco national. Typical middle-class lifestyle, maybe he secretly has a fortune be he doesn't look like it. Interestingly, despite living effectively in France, he is not French, he is not even a EU citizen, it means that when he went to study in France, he had to do more paperwork than someone from, say, Germany.

And BTW, while I didn't live in Monaco, I went there a few times (2h drive from where I live) and it definitely feels the way you describe it.