WILL the ripples of the US sub-prime mortgage scandal spread worldwide, making even the rich reluctant to invest in real estate? This week the upmarket estate agent Savills has forecast a quieter spell for the market in Central London, which has previously been impervious to the slowdown elsewhere in the UK. There have also been warnings from New York that its still-buoyant property market is set to slow down, following the trend elsewhere in America. Over the past seven years, prices in Manhattan have surged by 97 per cent. As demand softens repossessions are expected to flood the market, cutting prices of even luxurious properties.

Yet international estate agents maintain that the market for mansions should be relatively unscathed by events in the financial markets. A recent gathering of global estate agents in Valencia, Spain, made clear that, as far as they were concerned, the high end of the market operated under different rules. “Nobody knows how big these financial problems are,” says Giorgio Viganò, the Milan-based president of Eren, the European real estate network. “It has been a good market for seven years. Even if it stays flat for a while, it’s important to stay calm.” Many of the delegate agents were able to cite peculiarities in their own markets that they felt would insulate them from any global financial gloom.

As if to illustrate, the Salzburg delegate, Leo Hohla, from Stiller and Hohla immobilientreu-hander, left the room to finalise the sale of a €5.2 million (£3.2 million) castle, complete with dressage ring and stables, to a Belgian client.

In Portugal, Ole Jespersen, from International Realty Group, discloses that the European agencies had been having their best year. “We have clients buying houses for €2.5 million knowing that they were going to demolish them to build something bigger.” Golf is a strong attraction and an insulating factor against a potential downturn in the market, particularly in Quinta do Lago, where a five-bedroom, six-bathroom villa with a high-spec interior will cost you more than €6 million.

In New York, Diane Ramirez, of Halstead Property, says that demand consistently outstrips supply in Manhattan. Another reason for a strong New York market is that “...while the availability of jumbo loans may be tightening, entry into many of New York’s cooperative apartment blocks has traditionally demanded a greater cash investment and the structure of the loans is different, causing fewer problems”. A Park Avenue apartment on its books is going for $6 million (£3 million).

Rarity can also play its part. In Sardinia, planning laws introduced last year limiting new-build schemes near the coast mean that existing waterfront properties are particularly popular, according to Julia Bracco, of Immobilsarda SRL. Her firm has several properties for sale on the Costa Smeralda with prices of up to €20 million.

At this kind of price tag the buyer clearly lives on a different wealth planet to the average consumer. One American estate agent told me that the average buyer on their books owns 3½ homes already. When you’re looking to buy your fourth or fifth home, your buying criteria can change. These super-rich may be tempted by exclusive proximity to a ski slope or private scuba diving, hectares of wilderness or a large dose of city-centre culture. Some even branch out and hunt for property on other continents.

But there are other discernible trends. A recent American Express Publishing and Harrison Group study revealed that the affluent are keen to be seen to be doing good, and so the eco-credentials of a house become a selling point. One upmarket kitchen designer specialises in fitting ecologically friendly kitchens to many houses. However, when he was asked whether a particular client was environmentally sound, he replied: “Well... his kitchen is.”

Privacy is another fashion, with surrounding belts of land a must-have. And there’s safety in numbers. Once an area or destination comes on to the radar of the well-heeled, prices can rise rapidly as a whole squadron of the jet-set fly in.

Valencia and the nearby Costa Blanca are benefiting from the attention focused on the city this year by the America’s Cup, which finished in July. Valencia has been picked again to host the America’s Cup in 2009. This, coupled with the arrival of a Formula One street circuit in the city in 2008, should mean continued investment in the region. Immobiliari Rimontgó has a number of chic recently built houses for sale with colonnaded terraces on which you can sip cocktails and gaze out across your infinity pool to the Azure-blue sea beyond.

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CONTACTS:

www.rimontgo.es www.irgportugal.com www.halstead.com www.stiller-hohla.at www.giorgio-vigano.it www.immobilisarda.com europeanrealestate.org www.luxuryportfolio.com

FACTFILE

There are 153 properties for sale in Manhattan priced at more than $10 million, Halstead Property’s chief economist says.

In the Algarve’s “golden triangle” between Quinta do Lago, Vale do Lobo and Vilamoura, four and five-bed villas fetch more than €5,000 per sq m, says a report by PrimeYield and IRG.

In the US, income figures show that 87 families earned more than $1 million a year in 1936. In 2006, 300,000 families had joined that club.

In Valencia, a luxury apartment development next to Plaza del Ayuntamiento achieved a record price of €18,000 per sq m.

9,000 UK buyers bought property in Costa Blanca in 2006.

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