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December 2014

Global Market Volatility and Safe Havens

This isn't a financial blog, but the current state of the world financial markets has us pondering volatility, safe havens, and of course, luxury real estate.  

Anyone reading the headlines (or filling their gas tanks)  in recent days knows that the price of oil has plunged. OPEC and Russia have stuck to their guns and have not cut production.

The currencies of oil producing nations have taken a hit, the most obvious being Russia which has seen a massive increase in interest rates from 10% to 17% and seen the Ruble tumble sharply against the US Dollar.  It is being reported that many western banks are suspending USD/RUB trading and closing all open positions (ouch!).


In the Middle East, equity markets are taking a big hit.

Here at home, some are speculating that U.S. and Canadian oil sands, shale oil, and other high priced petroleum ventures will be priced out of the market at these levels. The Financial Times reports that ,"Oil price fall threatens $1 trillion of projects." 

While we might be enjoying the numbers we're seeing at the gas pump, the global commodity, equity, and currency markets are experiencing high volatility, if not outright turmoil.  

Obviously what this means on a practical level depends on one's positions and exposure.  I think it is safe to say that we will being seeing a global flight to "safe havens" and that's probably not a bad thing for luxury real estate.  Interesting times...

Qatar’s royal family to convert three London properties into palace worth more than US$300 million


The royal family of Qatar plans to convert three prime properties in London’s Regent’s Park into a huge palace, making it the UK’s first home worth £200 million (US$312 million). When completed, the mansion is expected to be the most valuable residential property in London in private hands.

According to a story in London’s Daily Mail, the 13-bedroom residence will be the London home of the current Emir Sheikh Tamim bin Hamad bin Khalifa Al Thani.

Sheikha Mozah Bint Nasser Al Missned, one of the three wives of former Qatari Emir Sheikh Hamad bin Khalifa Al Thani, purchased the homes for an estimated £120 million (US$187.67 million) in 2013 and has reportedly hired architects and lawyers to oversee the transformation of the properties into a 33,000-square-foot mansion which will include a spa, heated swimming pool, beauty salon, butler and nanny quarters, a children’s floor, games rooms, powder rooms, massage areas, two elevators and a gymnasium.

Complete story, floorplan and photographs in the Daily Mail.