Saturday, July 28, 2007
The Most Expensive Homes In The World
There is just such a place, a 103-room mansion spreading out over 58 acres of gardens and woodlands called Updown Court located in Windlesham, Surrey, England.
To impress your friends, the entrance hall features a sweeping dual staircase modeled after one in the late fashion designer Gianni Versace's Miami home. Behind the staircase, a great hall supported by marble columns looks onto an ornamental pond, which holds a fountain that, at the flick of a switch, sprays water 200 feet in the air.
Marble abounds. Five acres of more than 30 different types of imported stone line the floors, driveway, and expansive terraces. One indoor swimming pool is styled as a Roman bath, while another is set off by a two-story stone mosaic depicting a snow-capped Mount Fuji (that would be in Japan …).
This 50,000 square foot house may be just what you need to escape your daily routine, with its heated marble driveway, 24-carat gold leafing on the mosaic floor of the study, a helipad for your flying trips to the store, the 50-seat indoor movie theather and the underground garage that has enough room to harbor eight limousines. Guests can be lodged in anyone of the 23 bedrooms but really – and in my professional view this is perhaps the most important bonus – the cost of upkeeping is a modest USD 2 million per year.
Conveniently priced at USD 138 million (that's right, million with a "m" as in Mary), this is no doubt Luigi's hand-picked bargain of the year. And the added plus is that it can be paid for also in Sterlings – now, who could ask for anything more. Just the perfect place to drop your darn Yankee accent … yeah.
If, on the other hand, you do not wish to leave North America and like horses, may I suggest the Hala Ranch to your otherwise inquisitive attention.
Conservatively priced at USD 134 million, this is an opportunity one can hardly afford to pass. Trust me on this one, or my name is not Luigi …
Have you ever considered relocating to Turkey? I'm asking because, as you know, although still in Asia (Asia Minor, to be exact) Turkey is poised to become Europe in the not too distant future. The perfect Europe, one might add – without the Europeans … But really, if you wish to cultivate your talent for archaeology and ancient history there is nothing better than this 30,000 square foot residence overlooking the Bosphorus in Istanbul, Turkey, (Europe). Sited on three-quarters of an acre, the Waterfront Estate offers opulent living with its 64 rooms, which feature large windows looking to the water. You can even fish from your bedroom. This mansion boasts not only gilded mouldings and crystal chandeliers, but it even has a rare quay that is nearly 200-feet long (as I said, you can fish from the bedroom). If you need a boat, the Turks can rent you one for about 1 Euro an hour.
Presently offered for sale for USD 100 million, there is a little room for negotiations here. Sorry, only American Dollars accepted by way of cash, Visa or Mastercard or, of course, debit card.
How about a pied-a-terre in none other than New York City for your week-end leisurely trips? Or for your next New Years Eve in the Big Apple, close to Time Square? Think about it, you wouldn't have to watch it on CNN anymore. If this is the case, may I recommend The Pierre Penthouse, a chateau in the sky that occupies the top three floors of one of the poshest hotels in New York City, right abutting Central Park. Guess the price, just guess it – USD 70 million!
Real Estate Chronicle
Labels: REAL ESTATE
Tuesday, July 24, 2007
Real Estate And The Degree Of Happiness
Real Estate can make us rich. Don't ask it to make us happy as well.
Having practically doubled in value during the past six years and going, real estate is over half way towards notching up its best decade ever. Market capitalism, the engine that moves real estate, seems to be doing its job well. But is it? Once upon a time that job was generally agreed to be to make people better off. Nowadays, this is not so clear. A number of real estate consumers backed, somehow, by an increasing number of analysts think that real estate ought to be doing something else: making people happy.
The view that real estate should be about more than just money has been widely held in Europe for decades. And now the idea of "wellness" behind real capital assets has sprouted in North America too, catering especially to the prosperous baby-boomers. Much of this draws on the upstart science of happiness, which mixes psychology with economics. Its adherents cite copious survey data, which typically shows some unsurprising results: the rich report being happier than the poor. However, a paradox emerges that requires an explanation: affluent countries, taken as a whole, have not gotten much happier as real estate has appreciated and as people have grown richer.
The science of happiness offers two explanations for the paradox. Capitalism, it notes, is adept at turning luxuries into necessities, thus bringing to the masses what the elites have always enjoyed. But the flip side is that people come to take for granted things they once coveted from afar. Homes they never thought they could possess become essentials they cannot do without. In a way, consumers are stuck on a treadmill: as they achieve a higher standard of living, they become inured to its pleasures.
Add to all this the fact that many of the things people most prize – such as an exclusive home address – are luxuries by necessity. An exclusive mansion, for instance, ceases to be so if it is provided to everyone. These "positional goods", as they are called (a reference to the hierarchical 'position' within society), are in fixed supply: you can enjoy them only if others do not. The amount of money and effort required to grab them depends on how much your rivals are putting in.
All this somehow casts a doubt on the long-held dogmas of Economics. The science of Economics, especially as it applies to Capitalism, assumes that people know their own interests and are best left to mind their own business. How much they work and what they buy is their own affair. But the new science of happiness is much less willing to defer to people's choices. In 1930 John Maynard Keynes imagined that richer societies would become more leisured, where people would have more time to enjoy the finer things in life. Yet most people still work hard to afford things they think will make them happy. They also aspire to a higher place in society and purchase status goods such as expensive homes, and in so doing they work even harder and have less leisurely time at their disposal.
On the other hand, if economic growth through consumerism does not make people happy, stagnation will hardly do the trick. Ossified societies guard positional goods even more jealously. A flourishing economy creates opportunity, which in turn spurs happiness to a certain degree. It is hard to say that most people were unhappy during the heydays of the real estate boom.
To find the real estate market or, for that matter, the entire capitalistic system at fault because they do not deliver joy as well as growth is to place too heavy a burden on them. For many to do well is not enough: they want to do better than their peers, and this competition sets anxiety very deep.
Real estate can make people well off and the consequence of it is that one can choose to be as unhappy as he wishes. To ask anymore of it would be asking too much.
Real Estate Chronicle
Labels: REAL ESTATE ECONOMICS
Thursday, July 12, 2007
Ten years ago Russia was in a state of disarray reminiscent of the Seventeenth Century. Putin's predecessor, Boris Yeltsin, had secured re-election in 1996 only by turning the privatization of the Russian energy sector into a sleazy scam, trading oil and gas fields for campaign contributions. Meanwhile, ordinary Russians had to endure rampant inflation and unemployment. As former Soviet republics and Warsaw Pact allies queued up to join NATO, the superpower seemed really to have become – as the Cold War joke had it – Upper Volta with missiles.
Then, at the end of 1999 Vladimir Putin took over, and since then he has ruthlessly reasserted the Kremlin's control over the energy sector – in fact over the entire country. When it comes to energy, Putin's Russia seems prone to loutish behaviour, despite constant claims that Russia is a reliable partner. Russian officials have made no secret of wanting to keep big oil projects in the family, and thus have pushed out of the country pretty much all major oil players, from Royal Dutch Shell to Mitsubishi. And the Kremlin has often intimidated neighbours with threats to cut off their oil or gas supplies. Last winter, for example, Russia appeared to blackmail the Ukraine's new pro-western government by cutting off the country's gas amid a dispute over prices. Early this year, when Lithuania had the temerity to sell an oil refinery to a Polish firm instead of a Russian one, the pipeline that supplies the refinery with Russian oil suddenly succumbed to a mysterious technical fault.
Through these bullying methods Russia's economy has bounced back, with growth averaging almost 7 percent and inflation coming down into single digits, and has enabled the country to once again re-establish its former political clout throughout the world. So much so, in fact, that at the recent international conference on Security Policy in Munich the Russian President declared that a "unipolar world", meaning a world dominated by the United States, would "plunge into an abyss of permanent conflicts".
Maybe so, but what would happen to a world dominated by Putin's Russian Federation?
His Russia is an energy empire, sitting on more than a quarter of the world's proven reserves of natural gas, 17 percent of its coal and 7 percent of its oil. America, for geographical and political reasons is not one of Russia's main customers, but three-fifths of Europe's natural-gas imports and one-fifth of its oil come from Russia. Energy is a weapon with which Vladimir Putin seems to be intent at restoring the lost greatness of the Soviet Empire. No longer needs Russia to go beg the West for money cap in hand, as it did in Boris Yeltsin's days. Now it can stand tall once more, not the least among the neighbouring former Soviet countries that many in Moscow have never reconciled themselves to losing.
Mr. Putin's use of energy as a weapon is only one instance of a newly-found Russian assertiveness that nowadays seems to border on gangsterism, as clearly pointed out by the assassination of former Russian Agent Alexander Litvinenko in London in December, 2006. Polonium has its merits.
Russia's geopolitical power has become a function of its energy exports. As history teaches us, the energy crisis of the 1970's helped the Soviet economy very much even has it hurt the West, by bathing the ailing Soviet system in petrodollars. But as oil prices slid below an average price of USD 20 per bbl. from 1986 through 1996, Russian power and prestige slid too. It is no coincidence that the price of oil touched USD 11 per bbl. in Yeltsin's miserable last year.
As the renaissance of Russia is now well under way, one can't avoid wondering the political implications of today's very expensive oil, for which we all pay out of our own pockets. Quite simply Russia is, after all, the only major power that has an interest in high oil prices, both economic and political. Which then conversely means that Russia is the only major power with no interest whatsoever in the stability of the Middle East. And it shows.
Russia poses America's biggest problem when it comes to stopping Iran from acquiring nuclear weapons capability. Russia is the one supplying Iran with more than 3000 centrifuges for the enrichment of uranium. Russia is fomenting anti-Americanism throughout the region as well as sowing the seeds of discord among Arabs. Russia's condemnation of President Ahmadinejad's repeated calls for Israel to be wiped off the map was lukewarm, at best. Russia is building the Iranian nuclear reactor at Busher, and the Russians have recently been awarded the contract to build an additional six such plants.
So, would this be the world with the Russian Federation at the helm? A world where destabilization of the Middle East would guarantee high energy prices on which Russian power has come to depend?
Some things never seem to change.
Real Estate Chronicle
Labels: POLITICAL ECONOMICS