We have all read about the great real estate bubble and subsequent housing market collapse. Now we are led to believe that homes in Florida are worthless while apartments in Tel Aviv are priceless. The truth is that Tel Aviv doesn’t even make it on the Global Property Guide’s 2010 top ten most expensive real estate markets in the world. On the other hand, Mumbai, India, at $9,163 per square meter, does.
However, the overall winner is Monte Carlo, the northern district in the city-state of Monaco. Real estate in this land of luxury costs an average of $47,578 per square meter. In Moscow, the runner-up, the price is less than half that $20,853 per square meter. London, England is next, at $20,756 per square meter, followed by Tokyo and Hong Kong. New York City placed 6th on the list, at $14,898 per square meter, followed by Paris, Singapore, Rome, and Mumbai at number 10.
Indian Tower of Babel
Now that we’ve covered the cities, what about the most expensive single homes? Well, as of this year, the winner is unquestionable. The Antilla, coincidentally in Mumbai, is the first $1 billion home the world has ever seen. It is a custom-built, 27 story towering mansion, where no two floors are alike, built by Mukesh Ambani, head of Indian petro-chemical giant Reliance Industries, India's most valuable firm by market capitalization. Ambani is listed as the world’s fifth richest man, and one can only imagine what he’s compensating for by constructing a 570 foot (over 180 meter) tall structure with double height ceilings, ballrooms, crystal chandelier ceilings, retractable stages, and 600 servants.
Until his project, the undisputed winner was the $500 million Villa Leopolda, an 80,000 square foot Château built in 1902 by King Leopold II of Belgium. The villa has been rumored to be the home of Bill Gates and many more global figures. However, it was actually home to French banker Edmond Safra, until he suffocated from smoke inhalation over ten years ago in a fire started by a diabolically creative staff member hoping to “save” the billionaire and claim a rich reward. Safra’s widow Lily still lives in the 19 bedroom villa, which boasts sports courts, a bowling alley, multiple kitchens, dining rooms and a movie theatre. One assumes these distractions help console her ongoing grief.
Then there are a handful of homes in the $150-$200 million range. The Penthouse, which will sit atop the 82 other apartments at the famous Number One Hyde Park address, is currently under construction in London. At over $100,000 per square meter, it is certainly the most expensive apartment in the world, guarded by the SAS, with special features such as panic rooms, bulletproof windows, iris scanners, and even a secret tunnel to the nearby Mandarin Hotel. The building boasts communal spas, squash courts and even wine tasting rooms. This plush apartment will have 24-hour room service, despite the floor to ceiling refrigerators.
Fairfield Pond in the Hamptons is the 63 acre (over 250 dunam) home of Ira Rennert, a close friend and active supporter of Prime Minister Bibi Netanyahu. His compound is the largest in the western world. The house itself has 29 bedrooms, 39 bathrooms, a huge dining room (91 feet or 30 meters long), 5 sports courts, a bowling alley, and a $150,000 hot tub. Clearly, the Rennerts expect to be extremely popular for quite a while
America’s richest man, Bill Gates, lives in a massive earth-sheltered mansion in the side of a hill overlooking Lake Washington in Medina, Washington. Nicknamed Xanadu, the 66,000 square foot (6,100 square meter) home is noted for its design and the technology it incorporates, including walls that are essentially murals with streaming video. In 2009, property taxes were reported to be over $1 million on a total assessed value of $147.5 million.
Renting costs more
As we marvel at the prices and opulence of these extravagant residences, there is another house, significantly more modest but much better known, that cost its current occupant nearly $800 million - to rent. For merely four years. I am, of course, referring to the White House. President Obama spent over three-quarters of a billion dollars on his presidential campaign in 2008. Add the over $300 million spent by Senator John McCain and we’re talking about the first billion dollar presidential campaign in history. Add the costs of the various primaries, and the overall cost of the 2008 presidential election exceeded $1.6 billion.
That’s almost twice as much as the previous election in 2004, over five times the cost of the 2000 election when George W. Bush sort of defeated Al Gore, almost 20 times as much as when Bill Clinton was first elected in 1992, and over 25 times what the election cost when Ronald Reagan came to office in 1980. That’s inflation on steroids and you don’t even get to keep the house!
To be fair, the rental agreement upon inauguration does include an option to renew for another four years. However, thanks to the genius of American democracy, the option belongs to the landlord and can be extended for only one additional term. Moreover, the price is not guaranteed and, if history is any indication, it is likely to become increasingly more expensive in the years ahead.
Take your $5 million a year seat
However, as costly as American presidential campaigns have become, by far the most expensive real estate in the world is, and is likely to remain, a chair.
That’s right, one chair in the Capitol Building which hosts the United States Senate and House Representatives can cost well over $5 million a year to rent! Election to the senate is staggered -- one third of the 100 senators run for six-year terms every two years. Each of the 435 congressmen must run for re-election every two years. Not including the $1.6 billion spent on the race to be president, candidates for the 435 house seats and 34 senate seats spent $3.7 billion in 2008. The number is expected is to be at least as high by the time all the checks are cashed in 2010.
Most house races will cost over $10 million. The senate race in Massachusetts to fill the seat made vacant by Ted Kennedy's death earlier this year cost nearly $40 million. Here in Florida, the three candidates running for senate have already raised over $50 million, and the number will likely reach $70 million as we get closer to the November 2nd election.
Not to be outdone by Washington DC, several state and even city elections have become prohibitive, especially when dominated by self-funders. Former Goldman Sachs Chairman and CEO Jon Corzine spent over $130 million dollars of his Wall Street wealth on his senate and two New Jersey gubernatorial campaigns, albeit he lost his most recent re-election bid in 2009. That same year, New York City billionaire Mayor Michael Bloomberg spent $100 million of his own money getting re-elected to a third term. This year, former e-bay CEO Meg Whitman has already spent over $120 million of her considerable fortune in an effort to replace California Governor Arnold Schwarzenegger, who is term limited. Moreover, in the spirit of the company through which she became so rich, she is likely to increase her maximum bid before the “auction” ends in less than four weeks.
Thanks a billion
So as expensive as it has become to rent the White House, at least you get the whole building, can move your family in, host great parties, and invite world leaders to spend the night. You enjoy nearly 18 acres (about 70 dunam), over 5,000 square meters of floor space on six stories, 132 rooms (mostly offices), 35 bathrooms, 412 doors, 147 windows, twenty-eight fireplaces, eight staircases, three elevators, five full-time chefs, a tennis court, a single-lane bowling alley, a movie theater, a jogging track, a swimming pool and a putting green. Therefore, while it still costs a few hundred million dollars a year to occupy these lovely premises, compared with each chair in the building down the street and what some folks are spending on securing significantly “lesser” positions nation-wide, the White House looks like a pretty good deal.
Published by Globes [online], Israel business news - www.globes-online.com - on October 12, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010