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It used to be called Millionaire’s Row, now it’s Billionaire’s. It’s the London street, Bishops Avenue, where Kazakhstani billionaire Horelma Peramam purchased a new home for $100 million last month. It was the highest price in a city known for high prices.
As crazy as housing prices got here, be glad you’re not trying to buy a pad in London where the average house now runs about $3 million. Property research firm Knight Frank says prices rose an astonishing 32% last year. That was driven almost entirely by homes costing $20 million and up, according to the news service Bloomberg.
The big question is whether the global credit crunch will start to whack at that appreciation. Knight Frank says London financiers are experiencing much of what their New York counterparts are. Profits at the big banks are down. Jobs and bonuses are being cut. The firm predicts home sales in London will fall 12% this year. Prices will rise just 3%.
Historically, homes in London have climbed 13% a year since 1976. Every homeowner made money, but the rich got richer. Homes in what the firm calls “super-prime” territory—$10 million plus—climbed at a 14% pace over the same period.
Here’s another shot of the $100 million home, which according to London’s Daily Mail stands at 33,000 square feet and has parking for 28 cars.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.