It has been two years since forecasters felt this good about the economic outlook.
In the latest quarterly survey by The Wall Street Journal, business and academic economists lowered the chances of a recession within the next year to 29% from 39% in the January survey . That was the lowest probability since April 2022, when the chances of a recession were set at 28%.
Economists, in fact, don’t think the economy will get even close to a recession. In January, they on average forecast sub-1% growth in each of the first three quarters of this year. Now, they expect growth to bottom out this year at an inflation-adjusted 1.4% in the third quarter.
Just 10% of survey respondents think the economy will experience at least one quarter of negative growth over the next 12 months, down from 33% in January.
The Wall Street Journal survey was conducted from April 5 to 9, just before the release of March consumer-price index data showing inflation running hotter than economists had anticipated.
The U.S. economy has far outperformed expectations over the past year and a half. Instead of stumbling under the weight of the Federal Reserve’s most aggressive interest-rate-raising campaign in four decades, it has continued expanding at a robust clip.
Few think that the economy can do quite as well as last year’s 3.1% growth, as measured by the seasonally adjusted fourth-quarter change from a year earlier. That figure might have been boosted by one-time factors such as federal infrastructure and semiconductor legislation and an uptick in immigration , which also might not last.
Still, economists have had to rethink forecasts for a major slowdown as more time has passed and one still doesn’t seem imminent. Economists on average think the economy grew at a 2.2% rate in the first three months of the year, up from a 0.9% forecast in January.
“The U.S. economy is performing very well,” EconForecaster economist James Smith said in the survey. “We’re truly the envy of the world.”
Much has changed since economists were last this optimistic. Two years ago, the Fed’s benchmark federal-funds rate was set between 0.25% and 0.5%. Inflation was high but economists still generally thought that it could come down without too much help from the Fed. They forecast steady growth and the midpoint of the range for the fed-funds rate topping out at just above 2.5%.
Now, the fed-funds rate is sitting between 5.25% and 5.5%, and economists don’t see a bunch of cuts coming soon. Many analysts trimmed their rate-cut forecasts after last week’s hot inflation report. But even before the report, survey respondents predicted that rates would end the year at 4.67%, implying three cuts. In January, their responses suggested that they thought four or five cuts were likely.
Economists now think the economy can withstand higher rates than they did not long ago.
They expect the 10-year Treasury yield—a key borrowing benchmark that was around 4.4% at the time of the survey—to end 2024 at 3.97%. Looking further into the future, they expect the yield to end 2026 at 3.78%. That is slightly above even their forecast last October, when the yield was higher than it is now.
Many economists have long thought that the economy can handle higher interest rates when it is capable of growing faster, and particularly when worker productivity has increased.
To that end, economists expect the Labor Department’s measure of productivity to rise at an annual rate of 1.9% over the next decade. That matches the annual increase in productivity over the last 40 years. But it is above the 1.2% pace of the 2010s, when the 10-year Treasury yield was typically stuck between 1.5% and 2.5%.
Some economists are now enthusiastic about the economy’s longer-term potential.
“We think that the American economy has entered a virtuous cycle where strong productivity results in growth above the long-term trend, inflation between 2% and 2.5% and an unemployment rate between 3.5% and 4%,” RSM US chief economist Joe Brusuelas said in the survey.
Many aren’t quite as optimistic. One downside of a better growth outlook is that a stronger economy could make it harder for inflation to fall all the way back to the Fed’s 2% target.
An inflation gauge that is closely watched by the Fed, the core personal-consumption expenditures price index, was 2.8% in February, its most recent reading. Economists now expect it to end the year at 2.5%, after having forecast 2.3% in January.
Economists, on average, believe that core PCE inflation will fall to 2.1% by the end of next year without a recession. However, their projections might already have ticked higher after last week’s price data, and some continue to worry that the Fed’s efforts to control inflation still present a major threat to the economy.
“The risks are clearly skewed toward more hawkish Fed outcomes, which could drag on our growth forecasts,” Deutsche Bank economists Brett Ryan and Matthew Luzzetti said in the survey.
The Wall Street Journal survey was answered by 69 economists. Not every economist responded to every question.
For some vacationers, the ideal getaway involves $1,200 ozone therapy or an $1,800 early-detection cancer test.
Call it the longevity vacation. People who are fixated on optimising their personal health are pursuing travel activities that they hope will help them stay healthier for longer. It is part of a broader interest in longevity that often extends beyond traditional medicine . These costly trips and treatments are rising in popularity as money pours into the global wellness travel market.
At high-end resorts, guests can now find biological age testing, poolside vitamin IV drips, and stem-cell therapy. Prices can range from hundreds of dollars for shots and drips to tens of thousands for more invasive procedures, which go well beyond standard wellness offerings like yoga, massages or facials.
Some longevity-inspired trips focus on treatments, while others focus more on social and lifestyle changes. This includes programs that promise to teach travellers the secrets of centenarians .
Mark Blaskovich, 66 years old, spent $4,500 on a five-night trip last year centred on lessons from the world’s “Blue Zones,” places including Sardinia, Italy, and Okinawa, Japan, where a high number of people live for at least 100 years. Blaskovich says he wanted to get on a healthier path as he started to feel the effects of ageing.
He chose a retreat at Modern Elder Academy in Mexico, where he attended workshops detailing the power of supportive relationships, embracing a plant-based diet and incorporating natural movement into his daily life.
“I’ve been interested in longevity and trying to figure out how to live longer and live healthier,” says Blaskovich.
Vitamins and ozone
When Christy Menzies noticed nurses behind a curtained-off area at the Four Seasons Resort Maui in Hawaii on a family vacation in 2022, she assumed it might be Covid-19 testing. They were actually injecting guests with vitamin B12.
Menzies, 40, who runs a travel agency, escaped to the longevity clinic between trips to the beach, pool and kids’ club, where she reclined in a leather chair, and received a 30-minute vitamin IV infusion.
“You’re making investments in your wellness, your health, your body,” says Menzies, who adds that she felt more energised afterward.
The resort has been expanding its offerings since opening a longevity centre in 2021. A multi-day treatment package including ozone therapy, stem-cell therapy and a “fountain of youth” infusion, costs $44,000. Roughly half a dozen guests have shelled out for that package since it made its debut last year, according to Pat Makozak, the resort’s senior spa director. Guests can also opt for an early-detection cancer blood test for $1,800.
The ozone therapy, which involves withdrawing blood, dissolving ozone gas into it, and reintroducing it into the body through an IV, is particularly popular, says Makozak. The procedure is typically administered by a registered nurse, takes upward of an hour and costs $1,200.
Longevity vacationers are helping to fuel the global wellness tourism market, which is expected to surpass $1 trillion in 2024, up from $439 billion in 2012, according to the nonprofit Global Wellness Institute. About 13% of U.S. travellers took part in spa or wellness activities while traveling in the past 12 months, according to a 2023 survey from market-research group Phocuswright.
Canyon Ranch, which has multiple wellness resorts across the country, earlier this year introduced a five-night “Longevity Life” program, starting at $6,750, that includes health-span coaching, bone-density scans and longevity-focused sessions on spirituality and nutrition.
The idea is that people will return for an evaluation regularly to monitor progress, says Mark Kovacs, the vice president of health and performance.
What doctors say
Doctors preach caution, noting many of these treatments are unlikely to have been approved by the Food and Drug Administration, producing a placebo effect at best and carrying the potential for harm at worst. Procedures that involve puncturing the skin, such as ozone therapy or an IV drip, risk possible infection, contamination and drug interactions.
“Right now there isn’t a single proven treatment that would prolong the life of someone who’s already healthy,” says Dr. Mark Loafman, a family-medicine doctor in Chicago. “If it sounds too good to be true, it probably is.”
Some studies on certain noninvasive wellness treatments, like saunas or cold plunges , do suggest they may help people feel less stressed, or provide some temporary pain relief or sleep improvement.
Linda True, a policy analyst in San Francisco, spent a day at RAKxa, a wellness retreat on a visit to family in Thailand in February. True, 46, declined the more medical-sounding offerings, like an IV drip, and opted for a traditional style of Thai massage that involved fire and is touted as a “detoxification therapy.”
“People want to spend money on things that they feel might be doing good,” says Dr. Tamsin Lewis, medical adviser at RoseBar Longevity at Six Senses Ibiza, a longevity club that opened last year, whose menu includes offerings such as cryotherapy, infrared sauna and a “Longevity Boost” IV.
RoseBar says there is good evidence that reducing stress contributes to longevity, and Lewis says she doesn’t offer false promises about treatments’ efficacy . Kovacs says Canyon Ranch uses the latest science and personal data to help make evidence-based recommendations.
Jaclyn Sienna India owns a membership-based, ultra luxury travel company that serves people whose net worth exceeds $100 million, many of whom give priority to longevity, she says. She has planned trips for clients to Blue Zones, where there are a large number of centenarians. On one in February, her company arranged a $250,000 weeklong stay for a family of three to Okinawa that included daily meditation, therapeutic massages and cooking classes, she says.
India says keeping up with a longevity-focused lifestyle requires more than one treatment and is cost-prohibitive for most people.
Doctors say travellers may be more likely to glean health benefits from focusing on a common vacation goal : just relaxing.
Dr. Karen Studer, a physician and assistant professor of preventive medicine at Loma Linda University Health says lowering your stress levels is linked to myriad short- and long-term health benefits.
“It may be what you’re getting from these expensive treatments is just a natural effect of going on vacation, decreasing stress, eating better and exercising more.”
Inflation in Australia is unlikely to follow last week’s surprising uptick in the United States, according to AMP deputy chief economist Diana Mousina. US inflation increased 0.4 percent in March, pushing the yearly inflation rate to 3.5 percent, up from 3.2 percentin February. This is well above the US Federal Reserve’s 2 percent target, and prompted analysts to push back theirpredictions on the timing of a US interest rate cut. The official US cash raterange is currently 5.25to 5.5 percent.
Australian and US inflation are now at similar levels. Our annual inflation rate is currently 3.4 percent, as per the monthly report for February. The rate was the same in January. Ms Mousina said Australian inflation peaked in December 2022, which was about six months after the US economy. While analysts have been watching US trends ever since for insights as to what may happen here, Ms Mousina said it was unlikely that Australia would also record an uptick in inflation for March.
“… we think Australian inflation will see a further slowing from here, unlike the recent pattern in the US,” Ms Mousina said. There are five key reasons for this, starting with how domestic conditions in the US and Australia have been impacted differently by monetary policy. Firstly, most US home loans are on long-term fixed interest rates. Most Australian mortgages are on variable rates, so mortgage repayments have lifted considerably and eaten into household budgets for living expenses.
“US outstanding mortgage rates have risen by 0.5 percentage points, compared to 3.2 percentage points in Australia. This is despite Australia increasing interest rates by 1 percent less than the US.As a result, households are in worse shape in Australia than the US.”
Ms Mousina said retail trading, real household disposableincome and consumer confidence were down in Australia but rising in the US. “A softer consumer weighs on spending and inflation,” she said.
Ms Mousina also said high US wages growth was keeping services inflation elevated. Australian wages growth has also increased, to its highest level since 2009, but is likely to taper off from here. “… the unemployment rate is expected to lift as labour demand has slowed,” she said.“Softer wages growth in 2024 will see a softening in services inflation.”
Prices in regular US price surveys have recently recorded an uptick, while prices in Australia have been trending down. Additionally, Australian pipeline inflation pressure, which gives a four-month lead on inflation trends, continues to head lower. Pipeline pressure is measured using energy and agricultural commodities prices, shipping rates, price surveys, advertised salaries on Seek and the China Producer Price Index. “… when we look at our Australian pipeline indicator, there is still a further slowing in inflation likely to occur, whereas progress in the US inflation indicator has stalled,” Ms Mousina said.
The last reason why Australia is unlikely to record an uptick in inflation is technical differences in the measurement of inflation between the two countries. The US CPI data has a high weighting to housing at 33 percent, including both rents and ‘owners’ equivalent rent’ which reflects property values. In Australia, only rents are included in the CPI index, with a weighting of just 5.8 percent. “Both rents and owners’ equivalent rent have had high inflation in the US,” she said. “If Australia had a higher weighting to rents, then services inflation would remain higher for longer, as very elevated Australian population growth is keeping rental inflation high.”
As any Porsche lover knows, the automaker produces an electric sports car, the Taycan, which in GT Weissach form (US$231,995) develops 1,019 peak horsepower and takes just 2.1 seconds to reach 60 miles per hour. But what Porsche doesn’t do is produce an electric version of its absolutely iconic 911.
At the moment, that’s a job for the British company Everrati, which installs electric power into examples of the 911 built between 1988 and 1994 (code named 964). Everatti also transforms Land and Range Rovers, as well as classic Mercedes-Benz SLs, and an interpretation of the Ford GT40. The 911s have carbon-fibre body panels for lightness and are built in California through a partnership with Aria. That company creates concept and pre-production vehicles for global automakers.
Everrati’s latest creation is the Porsche 911 Signature Wide Body. With the hard-to-miss ducktail, it resembles a 1980s Porsche Turbo—but handles better. For a price that starts at £290,000 (US$360,467) customers get a car with 500 horsepower and 368.78 pound-feet of torque. The car has a 62-kilowatt-hour battery pack from LG Chem, yielding in this lightweight configuration approximately 200 miles of range. A single motor is connected to a limited-slip differential.
Also available is a Legacy model with 247 horsepower and 228.64 pound-feet. These cars look like earlier 911s (without the wide body and ducktail, for instance) and are built in a time-consuming restoration process. Given the work required, the price is the same as the Signature.
The Everrati Porsche 911 Signature Wide Body offers 500 horsepower and 368.78 pound-feet of torque from an electric drivetrain. Everrati
Features on the Signature include electronically adjustable suspension, regenerative braking, a “Porsche inspired” five-gauge cluster, and DC fast-charging capability. Everrati is also offering a Signature Gulf Edition of the 911, painted in the iconic blue-and-orange livery of the Gulf racing team (as seen at Le Mans and other venues).
The first Everrati 911 to go to a U.S. customer this month is a Mexico Blue Signature model delivered to California resident Matt Rogers, who co-founded the smart thermostat company that eventually became Google Nest. Rogers said in a statement that his car “captures the zeitgeist perfectly, being sustainable and environmentally conscious while also keeping the character of [Porsche’s] air-cooled era.”
Justin Lunny, Everatti co-founder and CEO, tells Penta that the company “doesn’t ‘convert’ cars to electric; instead, we redefine them as electric vehicles, worrying about such factors as driving feel and weight distribution. We hire very-experienced EV engineers and use the highest level of electric components, such as batteries and motors you would see in EVs from OEM manufacturers such as Rimac or Lotus.”
The gauges look like Porsche items, but are altered to monitor battery performance Everrati
Lunny says that Everrati puts motor and batteries in the back, where Porsche located the engine and transmission on its 911s, with more batteries and power electronics up front, where the original gas tank resided.
U.K. customer cars will still make the trek to California. Lunny explains that right-hand-drive 911s are sourced in Britain and shipped to the U.S., where they’re stripped to the chassis and slowly built up with the new carbon-fibre panels. They then go back to the U.K. for finishing.
“EV is not the only answer, but we do believe it will become the predominate powertrain,” Lunny says.
The company concentrates on a few models, but it’s willing to entertain bespoke one-off commissions, such as an electric Lamborghini for a customer in the Middle East. Such projects require a huge engineering commitment, and the resulting vehicle isn’t by any means inexpensive, costing US$500,000 or more. But it will be fully developed as an EV.
Porsche, too, is mostly going electric, with plans to have EVs make up more than 80% of new car sales by 2030. In 2021, more than 40% of the cars delivered in Europe were at least partly electric, either plug-in hybrids or full EVs. The 911 has no plans for full electrification, though a hybrid version appears likely. Lunny himself drives a battery-powered Porsche Taycan.
A room you might not expect comes to mind when home seller Karen Haines reflects on fond memories at her Hollywood Regency-style house in Palm Springs, California: her bedroom closet.
“Forget the great room, swimming pool or hot tub. All the action in the house happens in the closet. It’s where everyone wants to be,” said Haines of the enormous space, which is decked out with white tones, mirrors, marble and gold finishes, and has double sinks with bird-shaped faucets.
Haines and her husband, Chris, are selling the house, designed by acclaimed architect Robert Marx and on the market with Douglas Elliman for $5.2 million. The couple, both entrepreneurs in the music industry, usually keep classic rock ‘n’ roll playing in the closet all day, she said.
“My daughter and I try on clothes in there, and Chris and I drink coffee in the morning and cocktails come evening,” she said.
For most homeowners, closets are merely functional—that is, a place to hold clothes, accessories and other items that they turn to for everyday wear. Some, however, are taking the coziness and intimacy of the primary suite’s walk-in closet to the next level and turning it into the home’s prized space. It’s become a place where couples can connect at the end of a hectic day or a lounge where owners socialise with friends, enjoy a morning coffee, and, yes, even imbibe with cocktails and wine.
Chris Lim, a real estate agent and former president of Christie’s International Real Estate, said that he is witnessing a redefining of the concept of walk-in closets.
“With the inclusion of features like bar sinks, lounge seating, spacious islands and glass displays and expanded vanity areas, walk-in closets now offer a retreat for morning rituals and post-day relaxation,” he said. “They’ve become hubs of activity and connection in multimillion-dollar homes.”
Oscar Flink
Part of the trend, he said, is the growing number of fashion and social media influencers, who often use their bedroom closets as their offices or filming space.
When it comes to showpiece closets, Brazilian design firm Ornare is a leading name and charges between $30,000 and close to $1 million for its services.
Claudio Faria, the CEO of Ornare Miami, said that when he opened his business in 2007, closets were an afterthought with homeowners investing their money in zhuzhing up public-facing spaces such as kitchens and family rooms. Now, he said, closets are dominating home design—his business has grown 50% annually for the last five years as a result.
“Closets have become more important because, in the way that wealthy people collect cars and art, they’re collecting clothes, and closets are the venues to show them off,” Faria said. They’re also a unique area to use in your home because of their intimacy and become talking points.”
Ana Paula Siebert Justus is a client and tapped Ornare to bring her vision of a glamorous closet to life. Justus, a fashion influencer, and her husband, Roberto Justus, an entrepreneur, own a five-bedroom condominium in Sunny Isles, Florida. The large wardrobe in their bedroom is awash in green hues, wood and leather. Backlighting features throughout, and there are sections for handbags and clothes plus a hat rack and a vanity with a chair.
“I spend a lot of time in my closet shooting content, so it needs to be in photograph-ready shape,” she said. “It has no door, and one of my favorite ways to connect with Roberto is to catch up as I’m getting dressed for the day or evening events. Our closet time is precious.”
Tina Trahan, a philanthropist and art collector, lives in Los Angeles’s Studio City neighbourhood in a 5,100-square-foot home that was the exterior for the home on “The Brady Bunch” TV series. She shared similar sentiments about her closet. She has repurposed one of the bedrooms into the space and has outfitted it with double-height rolling racks, a three-way mirror, a sofa, a Miele coffee machine and a fridge stocked with drinks including White Claws—her beverage of choice.
Windermere Real Estate
Trahan said that she frequently entertains girlfriends, and they love heading to her closet to drink tequila and wine and catch up.
“We end up ordering sushi and eating it there. My closet is 100% our favourite place to hang out,” she said.
Other examples of these double-duty flashy closets abound.
Real estate agent Katrina Barrett of Christie’s International Real Estate Walt Danley | Local Luxury is overseeing the marketing and sale of a $40 million home in Paradise Valley, Arizona. The centrepiece of its primary suite is an expansive closet with seating, a steaming area, hidden panels to store valuables and a secret door leading to a sports barn with a pickleball court and golf simulator.
In another example, Susan Archer is selling her home in Issaquah, Washington, near Seattle, for more than $6 million through Windermere Real Estate/Luxury Portfolio International. She described the property’s primary bedroom’s closet as “a haven for creating memorable moments with friends and family.”
The white-painted space has marble and cream walls and features backlighting, a display case that’s common in upscale boutiques, a washer and dryer, a wet bar, an island and seating.
“Many of my girlfriends and I have gathered around the island, their excitement palpable as they admire my collection. With champagne flutes in hand, the atmosphere is lively and carefree,” Archer said. “Beyond the soirées with friends, my closet holds a special place for precious moments with my daughter. As she grows, her interest in fashion blossoms, and my closet becomes a treasure trove of inspiration for her budding style.”
Kristina Morrison’s journey to a parallel universe started on a bus that navigated hot, dusty, desert roads, crossed through a gated community with drab cookie-cutter houses and stopped in front of an enormous, white Mediterranean-style mansion.
She walked through an archway dripping with silver beads that revealed a crystal clear blue swimming pool lined with palm trees, bright red flowers and large rocks. Beautiful people played putt-putt, danced to live DJs and drank lime-green margaritas on a vast green lawn decorated with stacks of pink and silver balls.
“Everything was so chic and elegant,” says Morrison, a model, actress and influencer, about the Clinique-hosted event that took place last April in Indio, Calif., during the first weekend of the Coachella Valley Music and Arts Festival.
The party was at an 8,900-square-foot custom-designed estate called Zenda, which rents for around $300,000 an event during the festival. Its owner, Miles Warner, who lives 140 miles away in Santa Monica, was initially going to buy a smaller place to rent out as an Airbnb when he wasn’t there golfing, but when he saw the prices Coachella events, which include parties and overnight guests, were commanding, he bought the nine-acre property in February 2022 for $5.8 million. He then invested around $700,000 to add bedrooms and convert a barn into a party space.
One Coachella weekend event can cover the estate’s expenses for a year, he says. “I’m just lucky it’s working. If it stopped working, it would get expensive quickly,” he says.
There has been a bloom of such rental mansions in Southern California’s Coachella Valley over the past few years. The annual festival, which will take place over the weekends of April 12-14 and April 19-21, brings roughly 120,000 people, most of them to an area that covers nine cities, including Palm Springs, Desert Hot Springs, Indio, Indian Wells, La Quinta, Coachella, Palm Desert, Rancho Mirage and Cathedral City, as well as unincorporated communities in Riverside County like Thermal and Bermuda Dunes.
But this year, rentals of these mansions are slowing down, causing some to reduce prices, according Kaylee Ricciardi, an LA-based luxury rental real-estate agent with AKG | Christie’s who represents a number of mansions. Current demand for all short-term rentals in the Coachella Valley is down 12% year over year for the first concert weekend, the most popular time span. Last year, 75% of demand for both weeks of the Coachella festival were already booked at this point, according to AirDNA.
This doesn’t bode well considering all that goes into these weekends. On the festival’s sidelines, companies hold invitation-only parties called “activations” to draw in influencers, some of whom are paid to attend. The goal is to create memorable moments, or “branded experiences” to ensure their products show up on TikTok and Instagram feeds. These swag-laden events take months to plan and involve elaborate sets and celebrity appearances. Mansions with amenities like lazy rivers, pickleball courts and infinity pools make for good backdrops.
As a result, the income brought in by all short-term rentals in the valley during the Coachella festival has grown significantly—up 30% in 2023 compared with 2019, according to an exclusive data analysis by short-term rental-analytics firm AirDNA. In the areas where many of these rental mansions are located, the growth over just the past year has been explosive: up 44% in Coachella and up 38% in Thermal.
The slowdown in bookings, some say, is due to a glut that is coming on the market, as more investors are buying, building and renovating massive properties to rent out. “There’s going to be empty houses this year,” says Zenda’s owner Warner. He says the “secret” (that there’s a lot of money to be made renting large estates for activations during Coachella) is out—and now it’s just a question of supply and demand. Zenda, where the Clinique party took place, finally rented out this year, months later than usual, and for a significantly lower rate since it’s just a group of festival goers and not for an event.
Some owners speculate that companies are cutting back because of the economy, but the production companies that are managing the activations say the festival is important. “It’s absolutely critical for brands,” says Zev Norotsky, whose L.A-based event planning company Enter is managing several parties this year.
Others attribute it to a lacklustre festival lineup, which features Lana Del Rey, the Creator, and Doja Cat. “It’s not Beyoncé,” (who headlined the festival in 2018) says Sean Breuner, the founder and CEO of a luxury-property management company AvantStay, which manages several of the large estates in the area, along with luxury homes across the country. Rumours continue to swirl that Taylor Swift will be there to support Del Rey, a good friend, and that she could even perform.
Camille Bressange/THE WALL STREET JOURNAL
Breuner bought his own rental mansion, a 5,000-square-foot estate called Buena Vista on 38 acres, with partners for $5.25 million in 2021. He spent over a million dollars renovating it and adding amenities like a tennis court, a large pool and a lake with paddle boats and kayaks. As it did last year during Coachella, Buena Vista will again this year host an event for Kourtney Kardashian’s lifestyle brand Poosh—an adult sleep-away camp and party. The property rents for more than $150,000 for an event at this time, according to rental agents.
Tony Schubert, owner of Event Eleven, an LA-based event-production company, says prices for these rental mansions have become so high that he realised it would be more cost effective to just build his own compound. For the past two years his company rented an 8,500-square-foot Mediterranean-style mansion on 19 acres with a man-made lake, an infinity pool and a 4-acre polo field called Cavallo Ranch, which rents out for around $300,000, where he runs an event called Nylon House, hosted by Nylon Magazine.
A few months ago he bought a 20-acre date farm in Thermal, part of Riverside County close to the festival, with two dilapidated houses for $850,000. He plans to build a 4,000-square-foot house, a lazy river and six A-frame sleeping villas that should be ready for next year’s festival. “I was looking at estates for clients and couldn’t believe how much money they were getting,” he says.
The Madrid, which spans 10,000 square feet, has eight bedrooms, three guest casitas, a poolside bar, an airplane hangar, a tennis court and two pickleball courts, is part of a whole rental mansion gated subdivision, complete with a guard, in Bermuda Dunes, created by Rick Kay, who runs a San Clemente, Calif.-based ball-bearing manufacturing company. Kay initially bought a single 10,000-square-foot home for $1.6 million in a subdivision in 2006, but when he ran into an issue renting short term, he decided to buy up the other 10 lots and build individual 10,000-square-foot houses, at a cost of $5 million to $8 million each. “Everyone has vacation rentals but no one else has a vacation village,” says Kay.
These side events held during Coachella are crucial to the local economy, particularly in the more remote areas like Thermal, which doesn’t have many hotels and restaurants to reap the benefits from the festival, says Mark Tadros,. He rents out the packhouse, traditionally where the dates are packed, on the property of his date farm, Aziz Farms, for as high as $150,000 per event during Coachella.
Last year an event called Oasis in partnership with Liquid I.V. (an El Segundo, Calif.-based hydration drink company) took place at the packhouse, but this year, the packhouse isn’t rented. “We are taking a different approach,” says Kyle Nolan, the executive producer at Sturdy, a L.A.-based design studio and creative agency that runs the Oasis event and says he isn’t doing any events off the festival grounds this year.
“I certainly hope this isn’t the new normal. I just think it’s an off year,” says Tadros, who also sits on a community council in Riverside County that approves or denies permits for special events in parts of the unincorporated areas. He says the permitting process has become much stricter in recent years.
This year Indio “clarified” its definition of a “large event,” requiring a permit for any party with over 40 attendees held at an estate with overnight guests because some property owners weren’t compliant, says Indio marketing and public information officer Jessica Mediano. Indio also doesn’t allow properties within 1,000 feet of the festival grounds during a major music festival event (i.e. Coachella) to hold events.
One of the more renowned events, sponsored by online fashion retailer Revolve , is also cutting back this year, holding its party on just one day instead of two and opting for a Palm Springs hotel instead of a private mansion as in previous years. A Revolve spokesperson says it will “still host the same amount of guests, we have just simply changed the format to keep things fresh, exciting and elevated.”
Last year the Revolve affair was held at the Emerson Estate, an over 8,000-square-foot mansion on 20 acres in Indio that rents for $30,000 for weddings and goes up to the six figure range for events. Emerson Estate owner Diana Lazzarini says she put a lot of money into her property getting ready for the Revolve party, such as putting in gates and an area for VIP parking, in hopes that they would return. She says she had a few lowball offers, but her estate isn’t booked for the first weekend of Coachella this year because it wasn’t worth accepting the lower prices people were offering. “It’s a lot of liability, headache and risk,” she says.
The Madrid House, advertised by its owner Rick Kay as “the house that never sleeps,” is also changing course. Instead of big parties on Friday and Saturday nights, there will be private daytime events run by Enter around the pool featuring pickleball and fitness classes with partners like Paper Magazine, True Religion, Saint James Iced Tea and LaCroix. Kay says he thinks he could charge as much as $200,000 for big events, but he prefers the smaller sized parties, which pay around $40,000 for the Madrid, because they are less of a hassle. The lower price played a role in why he chose the Madrid, says Enter’s Norotsky.
Instead of building one big estate on multiple acres for big events, some investors are now building multiple individual ultraluxury homes where headliner musicians can stay and companies can host influencers at smaller parties that don’t require permits.
David Corso, whose Corso Marketing Group manages a Coachella event estate called Zenyara, just finished building his own rental mansion property he named Villa Rosa. Designed by the CEO of RH, Gary Friedman (a friend), the very modern, polished concrete and balsa wood house will host Coachella musicians and guests in a quieter, more intimate environment for $10,000 to $30,000 a night, depending on the season he says.
Claudio Bravo is taking a similar path. The luxury mansion rental company magnate just finished building a $50 million project with 16 short-term rental mansions. Each spans 6,500 square feet. They are right next to each other in a gated community on a 10-acre property in Indio, near the festival site, called Bravo Collection in Indio. This year 13 of the homes, which rent for around $100,000 apiece for a week during Coachella, will be rented by Guess Inc.
Jen and Chris Baldivid’s Folsom, Calif.-based Walker Land Company owns the Old Polo Estate, a former date farm on five acres they bought in 2017 for $925,000 and added a pool, pond, volleyball and pickleball courts and a two-hole golf course. They rent it out for $50,000-$400,000 for events that attract as many as 3,000 attendees during Coachella’s first weekend. Last year’s activation was sponsored by clothing company Darc Sport and included a 40-foot long tunnel with plastic skulls embedded into foam walls. It’s not rented for the first weekend of Coachella this year.
Starting this year, the Balvadids have a different sort of mansion that is almost fully booked until summer, including during Coachella, with smaller events, like dinners, and guests staying over. It’s well known in the architectural community because it was designed in 1959 by Midcentury Modernist Walter S. White. The structure of the house, including the metal parabolic roof that floats over the angular white structure, is untouched, but they knocked down a wall to make it more open, added three sleeping casitas, put in a pool that mimics the shape of the house and turned a carport into an outdoor entertainment area.
While demand for short-term rentals has slowed for the first weekend of the Coachella festival, it is higher this year for what’s called Stagecoach—the country music festival held the weekend after the two Coachella festival weekends, this year April 26-28. Demand is up 39% year-over-year, according to AirDNA. That is giving mansion owners hope that there will be expanding opportunities for event rentals beyond Coachella.
There are still more event mansions on the horizon. Drew MacLurg owns the Stallion Estate, a 7,000 square foot home on 5 acres he bought for $4 million in March 2022. He charges around $200,000 for an event for the first weekend of Coachella, but he didn’t get any interest for that this year so he is renting it to a private group for three nights for around $18,000, he says.
MacLurg put in about $1.6 million adding a 60-foot long pool with a waterslide, a decked-out game barn, a pickleball court and a nine-hole mini golf course. He is currently building a 7,000-square-foot house nearby that will have a lazy river and a bowling alley for event use.
Another is the Pond Estate, a 12,700-square-foot Hacienda-style mansion with indoor and outdoor swimming pools and two guesthouses (4,000 square feet and 2,000 square feet) on over 12 acres in South Palm Springs. Tom Ryan, the president and CEO of streaming at Paramount, bought the property, near a house he owned, for $8.38 million in June 2021 after stumbling on it with his wife. He says he was blown away by the beauty and history and is putting in a couple million dollars renovating and redecorating it, including creating a game room and entertaining spaces out of former garages, each 3,000 square feet. He plans to rent it out for weddings, private parties and during Coachella for events.
Ryan says he didn’t buy it as an investment to make as much profit as possible—he sees the event business more as helping offset costs for a property his family will own for generations. “It felt like a once in a lifetime opportunity,” says Ryan.
Global prices for cocoa and coffee are surging as severe weather events hamper production in key regions, raising questions from farm to table over the long-term damage climate change could have on soft commodities.
Cultivating cocoa and coffee requires very specific temperature, water and soil conditions. Now, more frequent heat waves, heavy rainfalls and droughts are damaging harvests and crippling supplies amid ever growing demand from customers worldwide.
“Adverse weather conditions, mostly in the Southern Hemisphere, have played an important role in sending several food commodities sharply higher,” said Ole Hansen , head of commodity strategy at Saxo Bank.
The spikes in prices are a threat to coffee and chocolate makers across the globe.
Swiss consumer-goods giant Nestlé was able to pass only a fraction of the cocoa price increase to customers last year, and it may need to adjust pricing in the future due to persistently high prices, a spokesperson said.
Italian coffee maker Lavazza reported revenue of more than $3 billion for last year, but said profitability was hit by soaring coffee bean prices, particularly for green and Robusta coffee, and its decision to limit price increases.
Likewise, chocolatier Chocoladefabriken Lindt & Spruengli said in its 2023 results that weather and climate conditions played a major role in the global shortage of cocoa beans that led to historically high prices. The company had to lift the sales prices of its products and said it would need to further raise them this year and next if cocoa prices remain at current levels.
Hershey ’s chief executive, Michele Buck , said in February that historic cocoa prices are expected to limit earnings growth this year, and that the company plans to use “every tool in its toolbox,” including price hikes, to manage the impact on business.
In West Africa, where about 70% of global cocoa is produced, powerhouses Ivory Coast and Ghana are facing catastrophic harvests this season as El Niño—the pattern of above-average sea surface temperatures—led to unseasonal heavy rainfalls followed by strong heat waves.
Extreme heat has weakened cocoa trees already damaged from heavy rainfall at the end of last year, according to Morningstar DBRS’s Aarti Magan and Moritz Steinbauer. The rain also worsened road conditions, disrupting cocoa bean deliveries to export ports.
The International Cocoa Organization—a global body composed of cocoa producing and consuming member countries—said in its latest monthly report that it expects the global supply deficit to widen to 374,000 metric tons in the 2023-24 season, from 74,000 tons last season. Global cocoa supply is anticipated to decline by almost 11% to 4.449 million tons when compared with 2022-23.
“Significant declines in production are expected from the top producing countries as they are envisaged to feel the detrimental effect of unfavorable weather conditions and diseases,” the organization said.
While the effects of climate change are severe, other serious structural issues are also hitting West African cocoa production in the short- to medium-term. Illegal mining poses a significant threat to cocoa farms in Ghana, destroying arable land and poisoning water supplies, and the problem is becoming increasingly relevant in the Ivory Coast, according to BMI.
The issues are being magnified by deforestation carried out to increase cocoa production. Since 1950, Ivory Coast has lost around 90% of its forests, while Ghana has lost around 65% over the same period. This has driven farmers to areas less suited to cocoa cultivation like grasslands, increasing the amount of labor required and bringing further downside risks to the harvest, the research firm said.
The Ivory Coast’s cocoa mid-crop harvest—which officially starts in April and runs until September—is expected to fall to 400,000-500,000 tons from 600,000-620,000 tons last year, with weather expected to play a crucial role in shaping the market balance for the season, ING analysts said, citing estimates from the country’s cocoa regulator. Ghana’s cocoa board also forecasts a slump in the harvest for this season to as low as 422,500 tons, the poorest in more than 20 years, according to BMI.
Neither regulator responded to a request for comment.
Meanwhile, extreme droughts in Southeast Asia—particularly in Vietnam and Indonesia—are resulting in lower coffee bean harvests, hurting producers’ output and global exports. Coffee inventories have recovered somewhat in recent weeks but remain low in recent historical terms. Robusta coffee has seen a severe deterioration in export expectations, while Arabica coffee is expected to return to a relatively narrow surplus this year, said Charles Hart, senior commodities analyst at BMI.
The global coffee benchmark prices, London Robusta futures, are up by 15% on-month to $3,825 a ton. Arabica coffee prices have also surged 17% over the last month to $2.16 a pound in lockstep with Robusta—its highest level since October 2022. Cocoa prices have more than tripled on-year over these supply crunch fears, and risen 49% in the last month alone to $10,050 a ton.
“Cocoa trees are particularly sensitive to weather and require very specific conditions to grow, this means that cocoa prices are especially vulnerable to extreme weather events, such as drought and periods of intense heat, as well as the longer-term impact of climate change,” said Lucrezia Cogliati, associate commodities analyst at BMI.
Cogliati said global cocoa consumption is expected to outpace production for the third consecutive season, with intense seasonal West African winds and plant diseases contributing to significant declines.
Consumers hoping for a return to cheaper prices for life’s little luxuries in the midterm may also be in for a bitter surprise.
“There is no sugarcoating it—consumers will ultimately be faced with higher chocolate prices, products that contain less chocolate, and/or shrinking product sizes,” Morningstar’s Magan and Steinbauer said in a report.
“We anticipate consumers could respond by searching widely for promotional discounts, trading down to value-based chocolate and confectionary products from premium products, switching to private-label from branded products and/or reducing volumes altogether.”
The record-breaking rally for cocoa and coffee is likely more than just a flash in the pan, according to Citi analysts, as adverse weather conditions and strong demand trends are likely to support prices in the months ahead. The U.S. bank estimates Arabica coffee futures in a range of $1.88-$2.15 a pound for the current year, but said projections could be lifted if the outlook for 2024-25 tightens further.
At the heart of it all, climate change is set to play a major role, as the impact of extreme weather events could exacerbate the pressure on cocoa and coffee supplies, according to market watchers.
“I don’t expect prices to remain at these levels, but if we continue to see more unusual weather as a result of global warming then we certainly could see more volatility in terms of cocoa yields going forward, which could impact pricing,” said Paul Joules, commodities analyst at Rabobank.
For aspiring homeowners, be it a first-time buyer, downsizer, or investor, picturing your idea of homeownership bliss is the easy part. But before deliberating on furniture choices or scouting for that perfect neighbourhood coffee, understanding your purchasing power stands out as the most important step in ensuring your success in homeownership.
And with the Australian property market gaining momentum in 2024, there’s never been a better time to come to grips with your financial options.
In 2023, amid the changing financial landscape that saw rising interest rates and the cost of living skyrocket, among other factors, the total amount borrowed for property purchases across Australia was estimated at $300.9 billion, a 12.7 percent decrease from the previous year, according to PEXA’s latest Mortgage Insights Report.
Each mainland state also experienced a decline in new lending, according to the report, with Victoria and New South Wales seeing the biggest drops to $84.1 billion and $109.5 billion, respectively.
While this trend reflects the repercussions of such financial hardships on the everyday Australian, John Morello, director and auctioneer at Jellis Craig, said we’re seeing renewed confidence in the property market during the first quarter of 2024, particularly in Melbourne.
“Auction clearance rates have started the year strongly and consumer sentiment is rising. This lift is driven by cooling inflation and an improved outlook on interest rates. At Jellis Craig, as with the rest of the market, we are experiencing an increase in volume of property compared to the same period in March last year (up 28% in 2024),” Mr Morello said.
“Melbourne’s property market, in particular, is showing its ongoing evolution and resilience.”
PEXA’s report revealed that, while borrowing saw a decrease in 2023 in Australia, Australians still invested $613.0 billion in property purchases in 2023. In 2024, purchasing confidence is only going up, as prospective first home buyers, seasoned downsizers, and savvy investors look to capitalise on a flood of new property hitting the market, coupled with the lowering of interest rates across the board.
“With more certainty in the economic outlook, along with an increase in volume of property available, we are seeing these factors translate to early signs of a boost in confidence in both buyers and sellers,” said Mr Morello.
“Further encouraging data shows that whilst there is more property available to purchase, more people are inspecting property, again indicating that demand has increased broadly across our marketplace.”
If you’re in the market for a new property, the biggest question you must ask yourself is how much house can I afford?
A great starting place is to speak with your mortgage broker or financial professional, who can guide you on your lending options. This is critical, as you need to know what your future repayment options might look like, and ultimately, what you will typically be able to afford.
A useful tool for judging whether you can afford a specific property is to factor in the 28/36 rule — a rough guide that suggests you should not spend more than 28 percent of your gross monthly income on housing, and no more than 36 percent on all debts. Another useful tool is the idea of a debt-to-income ratio (DTI); a formula whereby an individual can divide all of their monthly debt payments by gross monthly income to arrive at a number that one can measure as a way of managing monthly mortgage payments.
Mr Morello emphasised the need to understand affordability and what’s feasible for each individual when looking to make a purchase, no matter the budget, on a property in 2024.
“It’s pivotal to work out what you can afford. Get your finances in order. Consider all associated costs with buying, and research what concessions and grants are available,” said Mr Morello.
“It’s easy for individuals to begin the process today. Start actively searching potential properties on a weekly basis, and research areas you are interested in. Check weekly sales results, attend inspections and auctions, to get a feel for the process. Just remember, it’s important to be really comfortable in understanding your living expenses, and what the ongoing expenses will be once you have bought a property.
“For example, mortgage repayments, council rates, water, power, owners corp fees, insurances, maintenance costs; if you are buying as an investment, the Land Tax payable on that property which is an ongoing tax. There’s many factors to consider.”
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To see what’s possible for your specific circumstances, visit our Finance Portal for specific tools, guides and tips—as well as our own mortgage calculator—to assist you on your property journey.
One in five Australians think lying to a partner about spending or income is worse than physically cheating or having an affair. A Finder survey of 1,096 people found Baby Boomers are the most worried about financial lies in a relationship, with 23 percent feeling concerned about it. This compares to 22 percent of millennials, 21 percent of Gen X and 18 percent of Gen Y.
Sarah Megginson, Finder’s personal finance expert, said there can be major fallout from financial secrets.
“Purposefully hiding information about money is a major red flag in relationships, especially when couples share finances,” she said.“Financial lies can be quite destructive and leave people feeling betrayed and untrusting. As our research shows, it can cause even more pain than a romantic affair.”
Ms Megginson said people lie about money for several reasons.
“For some people, the motivation to be dishonest is born out of embarrassment over a secret debt or an addiction that’s gotten out of control,” she said. “For others, it’s less about shame, and more about wanting to be prepared with a financial safety net in the event the relationship ends poorly, so they might have a ‘secret’ account they haven’t told you about.”
Keeping finances separate is a rising trend among couples in Australia, even if they are married with children. St George Bank surveyed 1,500 parents in 2018 and discovered only 51 percent combined their incomes in joint accounts, and 37 percentkept their money separate. The research also showed one in four people were keeping a financial secret. Women were more likely to keep a large debt secret and men were more likely to have a private savings account. Other financial indiscretions people were keeping to themselves includeda large purchase or a secret credit card.
Research by Relationships Australia showsmany couples are not having conversations about financial arrangements before entering into committed relationships. Four in 10 people did not discuss how their personal incomes would be shared before they committed to their partner. A majority of women (74 percent) and men (69 percent) reported no discussion about how finances would be divided if the relationship ended.
Ms Megginson said money was a source of conflict for many couples, with 40 percent of survey respondents saying the conflict related to their partners overspending. She encouraged couples to have regular, honest conversations. “If you’re hiding something, consider coming clean sooner than later. The longer it goes on, the bigger the problem can grow and the more elaborate your lies are likely to become.
“Financial trust is really crucial in a relationship, so it’s ideal if you can talk openly about money and get on the same page, and ideally support each other to reach financial goals together.If you feel like you are being taken advantage of or if you can’t leave a relationship because of financial issues, contact the National Debt Helpline,”she said.
Investors may want to give hydrogen a second look, but they’ll need to be patient.
There’s not a lot of love for the fuel on Wall Street. The Global X Hydrogen ETF is down 81% from its high in 2021, and other hydrogen stocks are well below their peaks.
Skeptics say the cleanest hydrogen is too pricey and still far away from becoming part of a viable marketplace. The government is still sorting out regulation and industry incentives. New infrastructure will be required, and it isn’t clear there will be enough customers once it’s built.
But even as investor enthusiasm faded, a raft of companies have been quietly exploring hydrogen as a clean-burning fuel that can be a building block in the energy transition. There are numerous corporate projects in development that could help propel the growth of a hydrogen economy and drive profits in the future. The Department of Energy is investing $8 billion in promoting clean hydrogen, with the creation of seven hydrogen hubs around the U.S. within the decade.
Many energy and petrochemical companies are studying or have hydrogen projects in the works as a way to decarbonise. One reason is that hydrogen is used in the refining process, and cleaner hydrogen could be used in industrial processes. Hydrogen can be turned into ammonia and is used in fertiliser. In its next wave, hydrogen could be widely used in industrial applications like steel making and for fuel in ships and aircraft.
Supporters believe all the money pouring in now will help bring costs down as hydrogen projects scale. Investors may want to look at traditional energy and industrial companies that are currently working on hydrogen projects as a way to play the long-term growth of a hydrogen market.
“All these companies…have decarbonisation aspirations,” said Marc Bianchi, managing director at TD Cowen. There’s a meaningful opportunity for companies that are already using thousands of tons of hydrogen a day to switch from dirtier to cleaner sources.
The U.S. uses about 10 million tons of hydrogen a year for applications such as refining and fertiliser. Hydrogen demand was about 2% of global energy consumption in 2020 and could grow to 20% to 30% in a net-zero economy, according to S&P Global Commodity Insights.
Hydrogen gas is colourless, but industry shorthand assigns colours based on how the fuel is produced. Green hydrogen is the most desirable. Electricity generated from solar or wind is used to split hydrogen from water molecules and produces no carbon byproducts. Blue hydrogen is made by using natural gas along with capture and storage technologies to limit CO2. Gray hydrogen is made with natural gas or methane and generates carbon dioxide.
S&P Global Commodity Insights projects the cleanest hydrogen, even with incentives, would be about three times more costly in parts of the country where renewable energy is more expensive, like the Northeast. In the best case, green hydrogen produced in Texas, using proposed tax incentives and credits, could be as low as $1 per kilogram, slightly less than the $1.3 per kilogram cost of gray hydrogen. In Europe, green hydrogen is $6 to $9 per kilogram.
The energy industry, however, is waiting to see the final structure of U.S. tax credits granted to clean hydrogen under the Inflation Reduction Act. The Internal Revenue Service issued a draft guidance on implementation.
It was viewed as too restrictive by many in the industry, and some industry executives say it put a chill on activity while they wait to see how deep incentives will be for their proposed processes. The comment period has just ended.
“Anyone in power generation wants to talk about hydrogen,” said Richard Voorberg, president of North America for Siemens Energy . “Now, we’ve seen that plateau over the last little while, meaning months. Everyone was excited about [the Inflation Reduction Act], but the guidance that came out Dec. 22 had people scratching their heads.”
Ernest Moniz, a former energy secretary, heads the consortium formed to organise a market for clean hydrogen, called the Hydrogen Demand Initiative. Moniz said recently that the guidance presented by the IRS was too narrow and could slow the industry’s growth if not changed.
“The philosophy has been to require upfront decarbonisation of the electrons that you’re supposed to be using for the electrolysis of water, and the fear—and I certainly fear it—is this will significantly inhibit the near-term demand creation,” Moniz said. “We might end up with a very low carbon grid, but a hydrogen market that’s way behind where it should be at that time.” He added that he’s watching for how the IRS adjusts its plans for the tax credits.
Investors looking at companies with hydrogen projects need to be sure the value is there for the company’s traditional businesses. Analysts say valuations don’t appear to reflect potential for hydrogen, even if some had in the past.
Hydrogen was once the “shiniest new toy” for investors, but disillusionment has set in, said Timm Schneider, CEO of Schneider Capital Group. “Not one investor has asked me about hydrogen at any company, like Chevron or Exxon, that has a hydrogen project, over the past 12 months,” he said.
One way to invest in the transition is through industrial gas companies. S&P Global is projecting that Air Products and Chemicals will be the leading industrial gas producer of hydrogen, in the amount of 5.2 million metric tons by 2030. Exxon Mobil is positioned to be the largest producer among oil-and-gas companies, with 1.5 MMT, S&P Global said.
Air Products CEO Seifi Ghasemi, speaking at the CERAWeek by S&P Global conference last month, said his company is currently the largest producer of grey hydrogen globally. He wants to be the leader in green and blue. The company began producing grey hydrogen at the request of the U.S. government in the 1950s for use in the space program.
Ghasemi said the company has two major projects in development. One is in northern Saudi Arabia, where the company will use wind and solar with its partners to create 650 tons of hydrogen a day. That project, he said, IS “30 times bigger than anything that exists today.”
Air Products has been collaborating with Baker Hughes , an energy services and technology company that has developed turbines and compressors. Baker is working on the hydrogen project in Saudi Arabia and the two have another project under way in Alberta, Canada that is expected to be operational next year. “Baker Hughes is interesting. It is supplying a turbine to that project in Alberta that’s going to run on 100% hydrogen. That’s been a bit of a challenge for the industry, to burn hydrogen in a turbine,” said Bianchi. Baker Hughes, he said, was the first to succeed.
The demand for hydrogen is still uncertain and the market is nascent. The anticipated supply of hydrogen is well ahead of demand, Enverus Intelligence Research said in a report last week. Only 30% of the U.S. projects expected by 2030 have disclosed customers.
But there was a bright note in the Enverus report. European Union decarbonisation targets could mean U.S. producers could find a significant export market.
Exports are what helped turn the U.S. into the leading producer of oil and gas. The energy industry might follow that playbook again with hydrogen.
The largest auction of Princess Diana’s belongings in 27 years, including clothes and accessories, will be held this summer in Los Angeles.
Julien’s Auctions will hold a sale of Princess Diana’s most important garments and accessories, both in Los Angeles and online, on June 27.
The collection, titled “Princess Diana’s Elegance & a Royal Collection,” will be the largest to go to auction since the Princess of Wales sold 79 of her dresses at Christie’s in 1997, just two months before her death, according to a news release from Julien’s Auctions, which is holding the sale on June 27. The previous sale brought in US$3.25 million for charity.
“Julien’s is honoured to present this historic auction that will celebrate Princess Diana’s iconic fashion style and her reign as the People’s Princess,” said Martin Nolan, co-founder and executive director of Julien’s Auctions, in a news release.
The Julien’s auction will include some of the princess’s most famous cocktail and evening dresses, suits, shoes, hats, and accessories.
Princess Diana wore a yellow and navy Catherine Walker skirt suit during her visit to Hong Kong in in 1989. Hong Kong Red Cross
Among the highlights is a Murray Arbeid midnight blue strapless tulle diamante star gown that the princess wore twice in 1986, to the premiere of Phantom of the Opera and to a dinner at Claridge’s in London for King Constantine of Greece. The gown is estimated to sell for between US$200,000 and US$400,000.
Another highly anticipated piece is an off-the-shoulder magenta silk and lace evening dress, designed by Victor Edelstein, that’s also estimated between US$200,000 and US$400,000. Diana wore the dress in London and in Hamburg, Germany, in 1987. Edelstein also designed one of Diana’s most famous looks—the ink-blue velvet, mermaid-style gown she wore while dancing with John Travolta at the White House.
Other garments that will be offered in the auction include a pink floral shirtdress (estimate: US$100,000-US$200,000), a Victorian revival evening gown with a fitted bodice and a Basque waist (estimate: US$100,000-US$200,000) and a two-piece yellow and navy skirt suit (estimate: US$30,000-US$50,000), all designed by Catherine Walker, one of Princess Diana’s closest collaborators.
Kurt Geiger evening shoes Julien’s Auctions
Many of Diana’s accessories, such as shoes, handbags, and hats, will also be sold. Some notable items include a pair of Kurt Geiger emerald green satin-jewelled vamp evening shoes (estimate: US$2,000-US$4,000) and a yellow and black felted wool turban-style hat, designed by Royal milliner Philip Somerville (estimate: US$10,000-US$20,000).
A portion of the auction proceeds will benefit Muscular Dystrophy U.K. Additionally, highlights of the collection will be on view at K11 MUSEA in Hong Kong from April 18-29 and at the Museum of Style Icons in Newbridge, Ireland, from June 11-27.
“We are also delighted to bring back many of Diana’s favorite fashion ensembles to Asia and Europe that she wore on some of her highly publicised international royal appearances and humanitarian efforts, such as her Catherine Walker suit from her 1989 visit to Hong Kong,” Nolan said.
About the author: Patrick L. Springeris an institutional-equities business developer and Japan and Asia market specialist. He worked at Morgan Stanley in management roles for more than 20 years.
Japan just concluded a 34-year trek in the wilderness of deflation and ended its nearly 20-year negative interest-rate policy. The stock market has responded by achieving new all-time highs, last seen in 1989, rising 35% in the past year.
This might look like the top, but a closer look at Japan’s market suggests that the end is just the beginning for the world’s third-largest market. This year likely marks the beginning of a multiyear Japan market revival that will start a major new capital markets cycle. Japan’s companies are just beginning to celebrate a long-awaited return of pricing power supported by an enamoured global investor base looking for international ideas in a friendly market.
Investors should focus on two trends. First, new micro and macro forces are at work to make Japan a preferred non-U.S. destination for several years. With the U.S. dollar at 20-year highs, portfolio managers know that it is typically time to diversify and buy cheaper overseas markets, but where to go? Europe is cheap but challenging, and the I of India is what currently remains best of the emerging markets BRICS grouping. Exposure to Asia is important for global portfolios given it is 45% of global gross domestic product. Yet strategists say that we now live in a “multipolar world,” a euphemism for the highest level of geopolitical risks in the world in decades. This limits China investment allocations for now.
But Japan is a pre-eminent security partner for the U.S. Japan also is quickly becoming a key partner in U.S. re-shoring strategies, especially as an alternative supplier of semiconductors and technology components. The re-shoring trend is compounded by the yen’s weakness. At nearly 152 yen to the dollar, Japan’s currency is trading at the lowest ratio since 1990. That means Japan is also likely to regain market share that it lost over the past 20 years to China in automobile components, industrial products, and machinery. Status as a security partner matters to investors now, which will keep allocations to Japan higher for longer.
Second, Japan’s differentiated market structure may provide more alpha-idea opportunities than investors might expect from an older, developed economy. In the U.S., megacaps and the Magnificent Seven rule the world for investors—and for good reason, given their recent outperformance. The high level of exchange-traded fund penetration in the U.S. also favours large-caps over small- and medium-capitalisation stocks. But in Japan, the list of Japan’s largest companies remains unchanged: Excluding SoftBank, all were established pre-1960.
According to Abrdn Investments, 45% of Japan’s benchmark Topix Index of 2000 constituents have no analyst research coverage, compared with just 3% of the Russell 3000 universe for the U.S. As inflation sparks growth, earnings surprises and inflections of Japan’s under researched companies will lead to significantly higher alpha capture opportunities.
Additionally, the Japanese government and the Tokyo Stock Exchange have initiated important corporate-governance reforms, and 26% of all listed companies have submitted specific plans to improve their stock valuation. But many more companies have yet to respond, providing more opportunities for investors.
Sorting Japan’s nearly 3,900 stocks into market segments is revealing. Japanese mid-cap and small-cap stocks have lagged behind large-cap stocks by 40% and 60% year to date, respectively, and have lagged by 25% and 46% on a one-year basis.
Such underperformance by itself is one thing, but for the many investors who have never seen inflation, wage growth, and domestic sales gains in Japan, they may find a discovery universe of new stocks with interesting characteristics such as these:
Organo , a $2 billion market-cap water treatment company that has traded over $60 million a day on some days and counts Taiwan Semiconductor Manufacturing as one of its key growth customers.
Nakanishi , a $1.5 billion dental-equipment and precision-tools maker that grew sales 23% last year, sports a 2.5% yield and a 24% return on equity, and has 12% of its stock price in net cash.
Chugoku Marine Paints , a global top-three maker of marine paints that has a 20% global share and a 15% return on investment capital, sells at nearly 11 times earnings, and has a 2.6% dividend yield.
Overall, this analysis finds nearly 100 companies with a market cap above $1 billion with net cash equal to 20% or more of their stock price.
The bottom line is that Japan’s culture of innovation, combined with an end to deflation, is likely to produce a new wave of capitalisations. During the decades of deflation, corporates and consumers alike were incentivised to save more, spend less, and underinvest. But with nominal GDP growth now running at a whopping 5% and record wage growth, inflation incentivises new capital investment, stimulating a new investment-banking cycle of financing.
There are risks to this outlook. Double-digit market rallies can lead to pullbacks, and investors need to watch for threats to Japan’s inflation and currency levels and to its appetite for reform. But what’s most important for investors to realise about Japan is how much has changed there, amid a changing world.
Guest commentaries like this one are written by authors outside the Barron’s newsroom. They reflect the perspective and opinions of the authors.
Australian home values rose by 1.6 percent over the March quarter following an 8.1 percent increase in 2023, according to CoreLogic data. Historically, home prices have typically fallen as interest rates rise, but the opposite has occurred due to a lack of supply and high demand turbocharged by immigration.
While the optimists theorise that property doubles every seven years, pessimists talk about a bubble and inevitable crash. But AMP chief economist Shane Oliver says the Australian housing market “remains far more complicated than optimists and doomsters portray it to be”.
Hereis a summary of Dr Oliver’s 7 key observations regardingAustralian property.
1. It’svery expensive
This has been the case since the early 2000s but it’s been getting worse. House price-to-income ratios have doubled since the year 2000. The 2023 Demographia Housing Affordability Survey shows the median multiple of house prices to income at 8.2 times versus around five in the US and UK. The years taken to save a 20 percent deposit for an average full-time wage earner have doubled from five years 30 years ago to 10 years now. The expensive nature of Australian property … is leading to rising wealth and intergenerational inequality.
2. It’s very diverse
This has been seen recently with rapid relative price growth in Adelaide, Brisbane and Perth. This divergence partly reflects a combination of better housing affordability and relative population growth, with Brisbane and Perth benefitting from interstate migration.
3. Mortgage arrears remain low (for now at least)
The low level of arrears partly reflects strong lending standards in Australia combined with the strong jobs market and a high level of savings buffers coming out of the pandemic. That said, arrears are starting to pick up and the risks will rise as buffers run down, scope to cut discretionary spending is exhausted and if the labour market deteriorates significantly.
4. Interest rates still matter
The downtrend in mortgage rates since the late 1980s underpinned the surge in property prices over the same period as it enabled buyers to borrow more relative to their incomes. And rate hikes have been associated with cyclical price falls with rate cuts usually needed for upswings. But of course, the impact of interest rates can be swamped by other factors at times, as has been the case over the last year. Price gains are expected to be around five percent this year with high rates dragging but the supply shortfall supporting prices.
5. It’s chronically undersupplied
This has been the case since the mid-2000s when immigration levels, and hence population growth, surged and the supply of new homes did not keep up. The pandemic’s freeze on immigration provided a brief relief but this was offset by a fall in the number of people per household and the problem has worsened with reopening leading to record immigration levels. This has pushed underlying housing demand to around 250,000 dwellings p.a. at a time when home completions are around 170,000 dwellings a year. So, the shortfall of homes is getting worse and likely to reach 200,000 dwellings by June.
6. Forecasting swings in home prices is hard
Failed property crash calls have been a dime a dozen over the last two decades and forecasting property swings has been hard. For example, Reserve Bank Governor Michele Bullock noted last month that “I wouldn’t like to predict housing prices…every time we tried…we seem to get it wrong…”.
7. Property has similar long–term returns to shares
[Since 1926] both shares and property return around 11 percent pa. Property’s low correlation with shares, lower volatility but lower liquidity makes it a good portfolio diversifier. So, there is clearly a role for it in investors’ portfolios.
In the heart of London, a duplex apartment within the city’s former U.S. Embassy, which has been recently transformed into super-prime residences, has hit the market for £21.5 million (US$26.9 million).
The unit, which has been given the presidential moniker of the “Oval Residence,” is within No. 1 Grosvenor Square, and is the last sponsor unit available from developer Lodha UK. The building, on Mayfair’s uber-posh Grosvenor Square, served as the U.S. Embassy from 1938 until 1960, and then as the Canadian High Commission from 1962 until 2013. After being restored brick by brick, quite literally , it reopened as residences in 2022.
Some of the prominent figures of the 20th century have passed through its doors, including John F. Kennedy, who called it home when his father was appointed U.S. Ambassador to the U.K. in the 1930s, Winston Churchill and Eleanor Roosevelt, who was loaned an apartment when she visited London during World War II.
The three-bedroom home spans 4,400 square feet and was designed by Blandine de Navacelle, creative director of Studio Lodha, the developer’s interior design practice.
“No.1 Grosvenor Square is one of the capital’s most iconic addresses, and the design of the Oval Residence needed to reflect this,” de Navacelle said in a news release. “With large, open-plan living spaces and floor to ceiling windows, the residence offered the perfect backdrop for statement artwork and eclectic, sculptural furniture.”
Mark Hazeldine
The home also boasts a sleek kitchen, a home theatre, a dining area, wood-panelled walls, fireplaces and a 576-square-foot terrace.
“I regularly visit French galleries and furniture ateliers and am drawn to their art-centric approach to design and interiors,” de Navacelle said. “I wanted to bring a touch of this Parisian eclecticism to No.1 Grosvenor Square, creating a sophisticated and elegant private residence that blends both the classic and the contemporary.”
The turn-key flat is being sold with all of its furnishings.
Future occupants will also have access to the building’s amenities, including an in-house concierge team, a private health club and spa, a pool and a cinema.
Grosvenor Square has been one of London’s most-famed addresses for centuries. Currently in the middle of a dramatic remaking, No.1 Grosvenor Square is just one the enclave’s storied buildings to be undergoing, or to have undergone, a complete transformation.
The former U.S. Naval Building at No. 20, has been transformed into the first solely residential project from the Four Seasons, and the iconic Eero Saarinen-designed U.S. Embassy that spans the entire western side of the square, is set to become the Chancery Rosewood hotel by 2025.
London has no shortage of diplomatic buildings that have been transformed into luxury homes. In February, and for the first time in more than a century, the former Italian Embassy, now a lavish mansion, hit the market for £21.5 million . The former Cypriot Embassy, meanwhile, sold in March for £25 million to a buyer seeking a grand family home in the city.
Artworks by Yayoi Kusama collectively sold for nearly US$81 million last year at the major global auction houses, making her the top-selling 21st-century contemporary artist, according to the Hiscox Artist Top 100 report.
The boost in sales for Kusama’s works pushed David Hockney, the previous year’s top-selling artist, to second place. Hockney’s art garnered US$50.3 million in sales last year, down from US$74.7 million in 2022, said Hiscox, a London-based specialty insurer.
The second annual ranking, compiled with research and analysis from London-based ArtTactic, also showed Kusama’s No. 1 ranking was consistent with a strong showing by women artists overall last year. Joining Kusama among the top five last year was Cecily Brown, who ranked fourth with US$31.7 million in sales.
Yoshitomo Nara, ranked third with sales of US$36 million and George Condo ranked fifth with sales of US$29.5 million.
Total sales of contemporary art made after the year 2000 fell 17% to US$955 million last year from US$1.5 billion in 2022, according to the report. Though sales of contemporary art by women fell 8% to US$306 million, the number of works sold rose 21%. And sales by their male peers fell a much sharper 20%, the report said.
“The market for female artists has been much more resilient than that for male artists,” the report said.
The results go beyond ultra-contemporary art. Earlier this year, ArtTactic reported that overall sales of art by women at the major auction houses hit a record US$825.8 million last year, up 7% from a year earlier.
Another mark of progress: Art by women comprised 32% of 21st-century art auction sales last year, up from 29% in 2022, as the number of women artists behind these sales continued to climb. There were 728 women artists represented last year, up 179% from 2019, the report said.
“Contemporary female artists have always been undervalued and underrepresented,” Robert Read , head of art and private clients at Hiscox said in a news release. “Meaningful progress has been made in recent years, as the market gradually begins to recognise the importance and value of their work, but we are still some way from parity.”
Following Kusama and Brown, the top female artists by sales value were Julie Mehretu, with sales of US$21.4 million; Jadé Fadojutimi, with sales of US$8.5 million; and Jenny Saville, with sales of US$7.8 million.
The Hiscox report just examined the auction market for works created in the 21st century and sold at Christie’s, Phillips, and Sotheby’s. This segment was stronger than much of the art market last year, with sales still 26% above pre-pandemic levels. Sales of art made before 2000 have fallen 22% since 2019, the report said.
This segment of the market is also making up a larger share of all post-war and contemporary art sold at auctions, reaching 70% last year from 63% a year earlier.
The Hiscox report was consistent with other analyses of the art market last year that found large-ticket sales, over US$1 million, declined in favor of sales of works with price tags of US$50,000 or less.
Within the 21st-century art category, the number of lower-priced works sold gained 25% while the number sold above US$1 million fell by 12%. The trend is backed by a near doubling in the number of artists making 21st-century works that end up at auction since 2019, the report said.
The benefits of so-called flipping—or the practice of selling art made by young artists within two years of their creation—fell dramatically, bringing in US$39 million in sales last year from US$67 million in 2022. That’s despite the number of lots with this newly made art at 662 was about the same as the previous year.
Though Kusama is 95 years old, 41% of those making 21st-century art are under age 45, unsurprisingly. Leading this group of younger artists last year was: Nicolas Party, whose works sold for US$20.2 million; the late Matthew Wong, whose works sold for US$16.5 million; Fadojutimi; Caroline Walker, whose works sold for US$7.5 million; and Dmitri Cherniak, whose works sold for US$6.7 million.
