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Away From the Beach Parties, Ibiza’s Inland Villas Are All the Rave

Demand for historic, inland homes is driving the latest housing boom in Ibiza—Spain’s party-loving island in the Mediterranean that’s better known for attracting celebrities and business tycoons to rent seaside villas or bask in their mega yachts along the coast.

Prices for renting or buying a property on the island have long been a pricey proposition, with demand high and inventory low. Since the start of the pandemic, however, this interest has grown significantly, along with prices. Waterfront properties are perennially popular and glamourised in the global press, but the residential market on the inner part of the island away from the sea has underpinned this recent spike, according to Jack Harris, a partner in the International Residential Department at the London-based firm Knight Frank.

“The coastal areas are more touristic, and as a result, they’re more transient and seasonal, with a fluctuating population that peaks in summer,” he said. “The centre of the island is a year-round destination with a variety of villages that bustle with life that include festivals, Christmas markets, art galleries, restaurants and more.”

Located off Spain’s eastern coast and one of the main Balearic islands, Ibiza may rank as the world’s most legendary party destination. It’s a culture that’s epitomised by the electronic dance music scene and nightclubs such as Pacha and Hi, where all-night bashes are the norm and tables command up to $50,000. According to Serena Cook, the founder of the luxury lifestyle company Deliciously Sorted Ibiza and a local resident, Ibiza has always been a hub for creatives.

Cook added that Ibiza’s mild winters, which see plenty of sunny days, have attracted home buyers to move there full time. People also come for the free-spirited vibe

“It’s a free-spirited place where anything goes, and there’s a melting pot of different nationalities,” she said. “In the last half-decade or so, it has gotten more and more luxury-focused.”

Booming Inland Towns

Santa Gertrudis is at the epicentre of inland living and has numerous notable restaurants and cafes as well as the international children’s school Morna International College, where transplants and locals enrol their children. Other towns include Sant Joan de Labritja and Sant Josep de sa Talaia.

In contrast to the contemporary villas typically near or on the water, these inland areas stand out for their fincas—either traditional homes dating to the 18th and 19th centuries that are constructed of mud and stone or new properties built in the classic finca style but reinterpreted for modern-day living. Harris and Cook said that the latter are hard to come by because the local government is stringent about protecting the landscape and doesn’t grant permits easily.

Fincas feature views of hills and olive trees instead of the ocean, and over the last three years, Harris said, the market for them has appreciated in the double digits.

“The advent of remote working is in large part behind this rise,” he said. “People are drawn to the serenity of the countryside, the amount of outdoor space you can get and the fact that you’re surrounded by nature.”

Given Ibiza’s relatively small size, the coast from any of these inland towns is less than a 30-minute drive away.

“If you feel like going snorkelling one day, you can choose the beach with the calmest water, and if windsurfing is what you’re after, you’re never too far from the beach with the best wind,” Harris said.

Local real estate firms also report an increase in sales of inland properties. It’s a local boom that’s defying a global slowdown that’s impacted high-end markets from London to Berlin in the face of rising interest rates and economic uncertainty.

Javier Medina, an agency manager at the real estate firm John Taylor Ibiza, said that his company has seen “soaring sales” in the past two years. “We had an increase of 30% in the first half of 2023 compared with 2022,” he said.

Meanwhile, Cook said her business “has gone through the roof.”

“We’ve jumped by 20% and sold five countryside homes last year for US$5 million or more,” she said. Inland homeowners include buyers from the U.S., especially New Yorkers and tech entrepreneurs from the West Coast, Europeans from countries such as England, France and the Netherlands. Several notable examples include the French designer Isabel Marant and the New York art gallery owner Howard Greenberg.

In following the trend, Cook herself sold her coastal home in 2021 and moved to a countryside property because she wanted more outdoor space and a garden to grow her own produce. Cook is the founder of Ibiza Preservation, a nonprofit that protects the local environment. The group recently reported that organic farming in Ibiza has jumped 20% in the last 10 years, with many inland homeowners growing their own fruits and vegetables.

Not Exactly a Bargain

A finca’s lack of sea views doesn’t mean bargain pricing, Harris said.

“With pricing high, your money shall certainly go further inland in comparison with the coast,” he said. “That said, properties historically hold their value no matter where they are.”

A countryside finca that’s in good condition and has four bedrooms, open views, a swimming pool, pool house, multiple outdoor terraces and possibly some olive trees, costs at least US$3.5 million, Harris said. Coastal properties of the same caliber are more than US$5 million and can be higher if they offer especially dramatic views.

The architecture firm Blakstad Ibiza is behind the most sought-after and priciest inland homes. Founded by Rolf Blackstad in the 1960s, it’s now run by his son, also named Rolf. The company refurbishes rundown fincas and also builds new ones, the younger Blakstad said, with prices averaging between US$6 million to US$18 million for a property.

“We had a half dozen or so projects a year pre-Covid, but now work on a dozen,” he said.

Blakstad’s fincas typically span between 5,000 and 6,000 square feet and feature sustainably sourced timber, bedrooms with outdoor showers, solar energy, large doors that open to outdoor spaces such as terraces and gardens that may blend into farmland.

As an example, Knight Frank is currently offering a renovated turnkey Blakstad-designed finca in the village of San Rafael that costs close to US$6.5 million and is set on a hillside. Surrounded by pine forests and Mediterranean plants, it has five bedrooms spread over a main and guest house, five baths, an abundance of outdoor space including a landscaped garden and a swimming pool.

“Ibiza’s parties will forever be iconic and appeal to tourists,” Harris said. “Look a little deeper, however, into the middle of the island, and you’ll discover why so many people are choosing to make it their home.”

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How Reflective Paint Brings Down Scorching City Temperatures

Cities across the U.S. have found relief from this summer’s record-setting heat with the help of technologies that shield roofs, pavement and other surfaces from the sun’s scorching rays.

Some of these technologies have been around for more than a decade but are experiencing greater demand as global temperatures rise. Washington, D.C., for example, has built more than 3,200 green roofs covering 9 million square feet—up from about 300,000 square feet in 2006, according to federal and city officials.

Other technologies, such as super-reflective coatings for pavement, streets and windows, are just now becoming effective and affordable enough for widespread use.

The Los Angeles neighbourhood of Pacoima, a densely packed location sandwiched between freeways and an industrial area, has created a partnership with GAF, a New Jersey-based roofing manufacturer, to paint a basketball court, local park and neighbourhood streets with a reflective coating.

“There’s a lot of asphalt and lack of investment for tree canopies,” said Melanie Paola Torres, 24 years old, a community organiSer with the group Pacoima Beautiful. “Given the fact that we are in an industrial zone, that contributes to the urban heat-island effect.”

The reflective coating has reduced air temperatures in the test area at 6 feet above ground by 3.5 degrees Fahrenheit during extreme heat days, and surface temperatures by 10 degrees, according to Jeff Terry, GAF’s vice president of corporate social responsibility and sustainability.

Sweltering conditions are worse in urban heat islands, which can be 10 degrees hotter than surrounding suburbs and occur as buildings, roads and other infrastructure absorb and re-emit the sun’s energy.

Cooling technologies mitigate this. Green roofs absorb heat before it penetrates the buildings beneath. Super-reflective coatings reflect the sun’s visible light and invisible infrared radiation away from surfaces to keep them cooler. And an ultra-white paint developed at Purdue University promises even more protection, although the product isn’t commercially available yet. Each strategy helps reduce energy use.

“The important thing is to help people cool their homes and workplaces affordably,” said Jane Gilbert, chief heat officer for Miami-Dade County, which experienced a record 46 straight days of a 100-degree-plus heat index this summer. “The more efficient we can make both the buildings and the AC systems themselves, the less we’re contributing both to greenhouse gases and also waste heat that goes to our urban heat islands.”

Miami is one of the most vulnerable cities to the urban heat-island effect, along with San Francisco, New York, Chicago and Seattle, according to an analysis by Climate Central, a New Jersey-based nonprofit that researches the effects of climate change. Its analysis found that 41 million people living in 44 cities face an urban heat-island effect of at least 8 degrees. Nine U.S. cities had at least one million people exposed to urban heat of 8 degrees or higher because of the local built environment.

To fight the heat, some cities are leveraging federal money and other incentives to persuade local builders to turn office buildings greener and cooler.

In Miami-Dade County, officials used federal funds to outfit 1,700 public housing units with new low-energy air-conditioning units. Local officials also offered a successful amendment to the Florida state building code requiring cool reflective roofs on all new commercial buildings beginning in 2024, and enrolled 150 structures in a voluntary energy-audit program to track improvements to cut energy use and keep temperatures down.

New York, Chicago, Philadelphia, Toronto and other cities are pushing green roofs with tax breaks and other incentives in an effort to lower energy bills and reduce ambient temperatures, according to Steven Peck, president of Green Roofs for Healthy Cities, a Toronto-based green-roof and -wall industry association. Peck said green roofs can be 30 to 40 degrees cooler than a similar-size blacktop roof, while also cutting waste heat from air-conditioning units.

In the Los Angeles neighbourhood of Pacoima, Torres says residents tell her the streets and playgrounds feel cooler since the reflective coating was completed in August 2022.

“The number-one thing that always comes up is the heat waves when you’re looking down the street,” Torres said. “They don’t see those anymore.”

The next step is to install reflective roofing material on a handful of homes as part of the neighborhood cooling effort. “We want to keep stacking the solutions to overall create a cool community with multiple strategies,” Torres said.

Altering the urban landscape to adapt to extreme heat requires money and technical know-how, according to city leaders and academic experts. But they also acknowledge the need to keep people safe as global temperatures rise.

“Any one solution is not going to necessarily be able to address the entire problem, but by systematically applying solutions that work in each individual location, we can make a dent in the urban heat-island effect,” said David Sailor, professor of geographical sciences and urban planning at Arizona State University.

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Is Now the Time to Invest in Emerging Markets?

For some investors seeking to diversify their portfolios, emerging markets are looking increasingly attractive.

There are 169 emerging-markets stock ETFs available to fund investors, with total assets of about $296 billion, according to fund researcher Morningstar Direct.

Some analysts and financial advisers say there is a lot to like about this sector right now. What is the argument for putting money into these exchange-traded funds? And what’s the argument for getting out, or not starting at all? Here’s a look at the pros and cons.

The Pros

One factor driving interest in emerging-markets ETFs is that emerging economies are growing faster than advanced economies, and that isn’t forecast to change soon. The International Monetary Fund forecasts real GDP growth of only 1.4% in advanced economies in 2024 due to inflation, monetary policy and other factors. In contrast, the IMF projects real GDP growth of 4.1% for emerging and developing economies, helped by countries such as India, which is expected to grow at a rate of 6.3%.

“The biggest reason to invest in emerging-markets ETFs today is to gain exposure to high-growth markets with burgeoning middle-class consumers such as China, India, Mexico, Taiwan, South Korea and Vietnam,” says Aniket Ullal, senior vice president and head of ETF data and analytics at CFRA Research. He says emerging markets are home to more than 4.3 billion people, and they account for about half of global GDP.

Crowds in the Ximen shopping district in Taipei, Taiwan., in June. Taiwan is one of the emerging economies that some ETFs focus on. PHOTO: AN RONG XU FOR THE WALL STREET JOURNAL

Another attraction is that valuations on emerging-markets stocks are low. While the price-to-earnings ratio of the S&P 500 was 22.4 based on trailing 12-month reported earnings as of July 31, the P/E ratio of the MSCI Emerging Markets—which includes the stock of most liquid large- and midcap companies in 25 emerging-market countries—was 14.13.

“This is a smart contrarian play for investors who want to diversify their portfolios geographically,” says Gabriel Shahin, president of Falcon Wealth Planning, an investment adviser in Los Angeles. “There is a fire sale going on in emerging-market stocks, and this is one of the smartest plays in equity investing right now.”

Some see these investments as a hedge, considering this year’s U.S. stock rally—dominated by a small number of large-cap technology companies—could end at any time.

Emerging-markets ETFs come in many varieties, so investors can choose those that align with their macroeconomic outlook and financial goals.

While some of these funds invest in a broad basket of emerging-market countries that span the globe such as the $72.1 billion iShares Core MSCI Emerging Markets ETF (IEMG), others invest in geographic regions such as Asia or Latin America or are country-specific.

The $64.2 million Franklin FTSE Latin America ETF (FLLA), for example, invests in large-cap and midcap companies in Brazil, Chile, Colombia and Mexico. It has returned more than 19% year-to-date through Aug. 29 and 15.6% over the past year. The $175.8 million Franklin FTSE Taiwan ETF (FLTW) invests in midcap and large-cap Taiwanese companies. It has a year-to-date return of 14.7% and a one-year-return of 8.2% as of Aug. 29.

For investors concerned about the economic slowdown in China, there are emerging-markets ETFs that exclude Chinese equities such as the $5.16 billion iShares MSCI Emerging Markets ex-China (EMXC). Its top holdings are Taiwan Semiconductor Manufacturing, Samsung Electronics and Reliance Industries.

Some emerging-markets ETFs target small- or large-cap stocks. One is the $34.2 million VanEck Brazil Small-Cap ETF (BRF), which is up about 32% year-to-date and 11.4% over one year as of Aug. 29. Others focus on industry sectors such as technology and e-commerce.

While most emerging-markets equity ETFs track indexes, an increasing number of newer funds are actively managed. Of the 11 emerging-markets ETFs that have launched this year, eight are actively managed, including Global X Brazil Active ETF (BRAZ), a $2.61 million fund that invests in Brazilian companies such as Petrobras, a multinational petroleum company, and Vale, the world’s largest iron-ore producer.

There are even emerging-markets ETFs that pay dividends, such as the $243.5 million SPDR S&P Emerging Market Dividend ETF (EDIV), which is up 28.2% year-to-date through Aug. 29 and has a dividend yield of 3.78%.

According to Morningstar Direct, the top-performing emerging market ETFs this year through Aug. 29 are VanEck Brazil Small-Cap, SPDR S&P Emerging Market Dividend and iShares MSCI Brazil Small-Cap (EWZS), which is up 24.1% so far this year and 5.7% over one year.

The Cons

Some advisers, however, say investors looking at emerging-markets equity funds should proceed with caution.

“Emerging-markets equity ETFs are more volatile than international ETFs that focus on stocks in advanced economies,” says Lan Anh Tran, a research analyst at Morningstar Direct. Over the past 10 years ended July 31, 2023, the standard deviation of the MSCI Emerging Market Index was 16.2% higher than the MSCI World Index—a proxy for global developed-market stocks, she notes. Standard deviation measures volatility, with a higher number representing more volatility.

That’s because any sudden geopolitical event (such as the war in Ukraine) or any economic shock (like soaring inflation or a global supply-chain disruption) can have a jarring effect on emerging-market economies that are dependent on commodity exports, tourism and the health of advanced economies, investment strategists say.

There also is the risk of government influence and regulation on emerging-markets stocks, says Tran. A government, for example, can decide to nationalise an industry at any time, or exercise control over an industry sector.

Currency movements are another risk factor to consider, says CFRA’s Ullal. “If the dollar strengthens against local currencies, your fund returns will erode,” he says.

“It’s important that investors understand this is a high-risk, high-reward investment before they dive into them,” says Andrew J. Feldman, the founder of A.J. Feldman Financial in Chicago. “These funds can be highly volatile due to a host of systemic risks in emerging-market countries, including economic risk, geopolitical risk, currency risk and liquidity risk.”

These challenges make some investors skittish about investing in emerging-markets ETFs, says Kevin Shuller, founder and chief investment officer of Cedar Peak Wealth Advisors in Denver. “They believe that companies domiciled in the U.S. do a lot of business in emerging markets, so if you own the S&P 500 or MSCI EAFE index you have all the exposure you need.”

“It’s a good counterargument,” he says, “but [it] doesn’t take into account that the party in the U.S. stock market may not go on forever.”

Many investment advisers instead suggest individual investors take a step-by-step approach when choosing an emerging-markets ETF and allocate 5% to 10% of their equity portfolio in such vehicles.

“Country selection matters most so check the fund’s geographic exposure,” says Perth Tolle, founder of Life + Liberty Indexes and the $625.4 million Freedom 100 Emerging Markets ETF (FRDM), which invests in about 100 companies in 10 countries that aren’t autocracies but freer markets such as Chile, Poland, South Korea and Taiwan.

Also look at the methodologies and metrics the ETF uses when choosing stocks for its index or portfolio, as well as the fund fees. The average expense ratio for this ETF group is 0.51%, according to Morningstar Direct.

“A good way to assess a fund’s value is to look at its weighted average price to cash flow,” a measure of the price of a company’s stock relative to how much cash flow it generates, says Kevin Grogan, chief investment officer at Buckingham Wealth Partners in St. Louis. It gives a pulse reading on how cheap or expensive the emerging-markets stocks are in the fund.

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China’s Country Garden Buys Time to Repay Debt—but Not Long

HONG KONG—China’s top surviving private developer bought more time to sort out its liquidity problems, giving investors hope that it will cobble together enough cash to avoid defaulting on its U.S. dollar bonds this week.

Country Garden Holdings on Friday said it got approval from investors in mainland China to extend the maturity date of $537 million in domestic bonds by three years. The yuan-denominated debt was originally due Monday. An offshore unit of the 31-year-old property giant separately made an interest payment of around $600,000 on a bond denominated in Malaysian ringgit on Monday, according to a person familiar with the matter.

The debt extension and bond payment created optimism that Country Garden can address a debt load that includes a range of foreign currency bonds—and a make-or-break interest payment this week.

The developer’s Hong Kong-listed shares jumped 15% on Monday, closing at their highest level in about three weeks. Other Chinese property stocks also gained, while the broader Hang Seng Index rose 2.5%.

Country Garden’s bond prices also edged higher, although most of its dollar bonds remained below 10 cents on the dollar, levels that indicate a high probability of default.

Chinese authorities have taken more steps in recent days to shore up the country’s beleaguered housing market, where sales have declined for most of the last two years. Last Thursday, the People’s Bank of China lowered minimum down payments on first and second home purchases and told banks they can lower the rates on existing mortgages. Regulators also recently expanded the definition of a first-time home buyer, a category that comes with lower mortgage rates and smaller down payments.

The rule changes helped to draw more people to real estate showrooms over the weekend. Demand for new homes in Shanghai increased noticeably after the new measures were implemented, according to Chen Julan, a senior analyst with China Index Academy. In Beijing, some developers withdrew discounts and adjusted their prices slightly higher, the research firm said.

The new rules could give a temporary boost to home sales in about a dozen major cities, said Song Hongwei, a research director of Tongce Research Institute, which tracks and analyses China’s real-estate market. He said lower-tier, poorer cities may not reap similar benefits and predicted that the overall housing market will eventually weaken again.

Country Garden’s recent cash crunch has largely been a result of slumping home sales in many parts of China. The company is one of the biggest surviving privately run developers and has a large presence in the country’s poorer regions. In August, it sold homes valued at a total of around $1.1 billion, almost three-quarters lower than a year earlier.

The company missed $22.5 million in coupon payments on bonds with a total face value of $1 billion in early August, and has a 30-day grace period to come up with the money. That grace period expires this week.

Even if it does pay the interest on its dollar bonds this week, it has many more coupon payments due in the coming months. Investors are skeptical that it can avoid default—unless its sales start growing again. Country Garden’s most recent financial report said that as of June 30, it had the equivalent of $15 billion in bonds, bank debt and other borrowings due within a year.

The company lost more than $7 billion in the first half of 2023, its worst financial performance since it went public in 2007, after its contracted sales for the period shrank 30%. Country Garden told investors it was “deeply remorseful” but said it was committed to turning things around.

China’s economy has struggled through much of this year, with falling exports, weak manufacturing and a slowdown in consumer spending all pointing to problems broader than a property slowdown. But cracks in the property sector, which was once seen as a major source of wealth creation in China, are exacerbating the broader economic malaise.

Chinese property developers’ falling property margins and weak sales will weigh on earnings until the end of next year, according to analysts at S&P Global Ratings. Not all developers will feel the same degree of pain. Those with links to the government or with good access to financing are better positioned to endure the fall in margins, the S&P analysts said in a note on Monday.

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This Australian retailer wants to ensure you’re sitting comfortably

When the newly appointed CEO of King Living, David Woollcott, first started with the Australian furniture retailer last year, he admits he was puzzled by the price point for their popular range of sofas.

“I was questioning why we don’t charge more for our product,” he said. “With the Jasper (sofa), which starts from around $4000, we could charge $7000 or $8000.”

The galvanised steel-framed sofas, which come with a 25-year warranty, have a strong following in Australia where they are a popular choice for those looking for affordable style that will last. The range includes sofas and armchairs in a variety of styles designed to be flexible enough to suit any space, or lifestyle, at a price point that is deliberately accessible.

King Living CEO David Woollcott

Central to the success of King Living, which started as a mother and son enterprise with David King and his mother Gwen in the 1970s, has been the decision to keep design, manufacturing and retailing under the one roof. Woollcott said it places King Living in a rare position in the market.

“We are in control, which is exciting for the consumer,” he said. “We know how our product is made and where the materials are sourced and we are acting as one entity. That instils trust.” 

It also means there are no additional players looking to add further costs.

“We don’t support a third party, so the additional margin we invest in quality,” he said.

King Living has marked their time in the Australian market with the re-release of its first piece of furniture, now known as the 1977 sofa. A surprisingly contemporary-looking chair designed to be ‘built’ piece by piece to create a modular sofa of your choice to suit small or large spaces, it embodies the kind of relaxed elegance Australian design has become known for.

The 1977 King Living sofa was recently re-released. It can be mixed and matched to any configuration.

It’s a design aesthetic and business model Woollcott said has been embraced as King Living expanded into markets in Singapore and Europe in recent years with North America to follow.

“What delineates us is that we are a designer, manufacturer and retailer of furniture — that is really unique,” he said. “There are many businesses who do the retail bit and they source from factories around the world. But we are in control, which is exciting for the consumer.” 

While the size of living spaces vary significantly across Europe, Asia and North America, Woollcott said there is enough variation and flexibility in the range to accommodate customers’ needs, whether it is the generous proportions of the Jasper and Kato sofas or the more compact Aura and Fleur designs. While best known for their sofas, King Living also has an extensive range of dining furniture, as well as beds, floorcoverings, lighting and storage options. Their outdoor furniture range is also gaining a strong following, taking the same approach to the design and construction of their interior furniture and translating it for  outdoor spaces.

And it’s not just the Australian market taking notice.

“Australian design is globally loved because it has a casual nature to it,” he said. “It’s informal, which doesn’t mean it is less sophisticated or less detailed. 

“Coming from the UK where it is all about the class structure and formality, Australia is the antithesis. It’s warm, approachable and casual.”

The King Cove reclining sun lounge is part of the popular outdoor furniture range.

Having spent the past five years in Europe as managing director of Fisher & Paykel UK & Europe, Woollcott is aware that customers are increasingly concerned about the sustainability of their products. The ‘reduce, reuse and recycle’ ethos is nothing new to King Living, he said.

“What stunned me when I met (founder) David King, they have acted sustainably from day one because they have made that link with waste not being a good thing,” he said. “It’s all about resources. I don’t think there would be a business leader out there who would not see the link between preserving resources and saving money.”

King Living also offers their King Care service, a commitment to recover or completely refurbish sofas for a cost, whether they were manufactured in 1977 or 2023.

While it may seem like a lot of fuss over a sofa, Woollcott noted that this key piece of furniture is often the backdrop to family life for years.

“Memories are made on our furniture and the sofa can end up becoming a member of the family,” he said. “Our furniture is designed to last for generations — and to be reconditioned.

“They take on a personality of their own.”

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Buildings Are Empty, Now They Have to Go Green

Their buildings echo with empty offices, their borrowing costs have soared, and now owners of buildings in cities across the U.S. are facing a new tax on their carbon emissions.

Cities are toughening their climate standards and are beginning to tax buildings that don’t meet the new requirements. Landlords are left with a difficult choice between paying for expensive upgrades to reduce emissions or paying the tax.

In New York City, which has one of the first and most expensive carbon taxes, landlords of large buildings (including owners of residential buildings) beginning next year will face a $268 fine for every ton of carbon dioxide emitted beyond certain limits.

“If you’re under cash flow pressure due to lack of tenancy, adding a tax on top of that isn’t a good sign,” said Bank of America CMBS Strategist Alan Todd. “It would be potentially pretty painful.”

The Wall Street Journal tallied the potential impact of the taxes on buildings that borrowed funds from Wall Street investors by issuing mortgage-backed bonds. The Journal also looked at properties owned by three of the country’s largest publicly traded landlords. The tax bill for 128 properties analysed could add up to more than $50 million during the first five-year enforcement period, which begins in 2024, according to the Journal’s analysis of Department of Building data and financial disclosures.

Fines for the same buildings could jump to $214 million if their landlords don’t meet the city’s emissions standards during the period between 2030 and 2034, the Journal’s analysis shows. The Real Estate Board of New York, an industry group, and engineering consulting firm Level Infrastructure said that more than 13,000 properties could face fines totalling about $900 million annually.

Buildings are by far New York City’s largest source of carbon emissions, which come from the fossil fuels used to heat and to provide air conditioning for them.

More than a dozen local laws regulating buildings’ carbon footprints from Chula Vista, Calif., to Boston have gone into effect since 2021 or will come online by 2030, according to carbon accounting firm nZero. Compliance also begins next year for buildings in Denver, while St. Louis properties face penalties beginning in 2025. Four other laws from Cambridge, Mass., to Reno, Nev., will go into effect in 2026.

The impact of the emissions laws initially will be small but will come on top of other, more costly problems faced by landlords. The law, based on New York’s current projections, would cost the 51-story skyscraper at 277 Park Ave. in Manhattan just $1.3 million in fines in 2024. The revenue of the building, owned by private landlord The Stahl Organization, was $129 million last year.

The building’s vacancy rate has jumped from about 2% in 2014 to 25% currently, according to commercial property data provider Trepp. JP Morgan Chase accounts for about half of the building’s space, but its lease expires in 2026. The bank is constructing a nearby tower that aims to produce net-zero carbon emissions and is scheduled to be completed in 2025. It wouldn’t comment on its leasing plans.

Stahl’s $750 million mortgage on the building is scheduled to mature next August. Stahl is now faced with potentially higher rates if it takes out a new loan, the loss of its biggest tenant and fines for carbon emissions.

Stahl declined to comment.

Shares of the three big landlords whose properties were analyzed by the Journal are trading at near historic lows. Shares of Vornado Realty Trust and SL Green, each of which has about 30 New York City office buildings, are down by roughly two-thirds since before the pandemic. Boston Properties Inc., one of the country’s largest office building owners, shares are down more than 50% from before the pandemic.

SL Green faces a potential carbon-tax liability of up to $6.6 million by 2030, according to the Journal’s analysis. The company declined to comment. More than 80 other properties financed using mortgage-backed bonds reviewed by the Journal could have a nearly $27 million carbon-tax bill by 2030.

The costly upgrades needed to comply with the law will hit some properties when they are on the block or when they are trying to attract tenants, who know they will effectively be paying for any improvements. “Tenants are looking to be in a building that is greener,” said Brendan Schmitt, partner in law firm Herrick’s Real Estate Department.

The library at the Manhattan office of Vornado Realty Trust, one of the landlords expected to be on the hook for a significant amount of New York City carbon taxes. PHOTO: VICTOR LLORENTE FOR THE WALL STREET JOURNAL

The new laws coincide with big government spending on climate. Landlords can get generous subsidies for projects that reduce emissions.

Ironically, landlords are also benefiting from emptier buildings, which burn less fossil fuel. New York City says about 11% of buildings covered under the law are projected to face penalties using the latest energy data, down from 20% using earlier data.

The city’s law was passed in 2019 and included a $268 fine for every ton of CO emitted by buildings over 25,000 square feet exceeding limits. Landlords will be required to report emissions to city officials starting in 2025 with penalties based on 2024 energy use.

Some big landlords are facing fines in multiple jurisdictions including Boston Properties, which will likely get hit on properties it owns in Boston, New York and Washington, D.C. The company’s eight New York City offices could face a $2.3 million dollar tax bill by 2030, according to city data.

Ben Myers, senior vice president of sustainability at Boston Properties, said complying with local building standards is important. “We have made energy efficiency a priority,” he said.

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China’s Neighbours Shouldn’t Cheer On Its Slowdown

China’s economic troubles have so far been a boon to other Asian markets. But if the world’s second largest economy continues to turn sour, things could start to look uglier for them too.

Major Asian stock markets have been doing well in 2023. Japan’s Topix index has gained 24% this year while Taiwan’s Taiex index has risen 18% and Korea’s Kospi is up 15%. That is in contrast to Chinese stocks: the MSCI China index has dropped 6%, despite a strong start of the year.

There are some fundamental reasons why Asian stocks outside of China have gone up. Buybacks and dividends are rising in Japan, while Warren Buffett’s endorsement gave the market another push. The hope of an eventual rebound in the semiconductor industry has lifted stocks in Taiwan and South Korea. But these markets also benefited from foreign investors fleeing Chinese stocks: markets such as Japan and South Korea have seen foreign inflows in recent months. Some multinationals have also been migrating manufacturing out of China and into other Asian countries to diversify their supply chains.

However, Goldman Sachs has noted that correlations between China and other markets in the region have risen lately, indicating potential concerns of spillover.

China is the top trading partner of many countries in the region like Japan and South Korea, and weak demand from China could ripple through to its neighbours. South Korea’s exports to China, accounting for roughly 20% of its total, fell 25% year on year in the first eight months of this year.

And falling investment in China—especially in the real-estate sector—could weigh on commodity prices. So far prices of commodities such as iron ore have been resilient this year as demand from sectors like autos and infrastructure have softened the blows from property construction. But commodity-exporting nations such as Australia, Malaysia and Indonesia could suffer if Chinese investment remains weak.

The confidence crisis in China could also hurt companies selling to the country’s consumers. The number of Chinese tourists, in particular, is still way down from pre-Covid levels for many countries like Japan and Thailand.

As China is the economic juggernaut in the region, the country’s pain is unlikely to be its neighbors’ gain for long.

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With an EV, I Had to Learn to Drive All Over Again

Look, when you drive an electric car, you have to toss out what you know about gas guzzlers. Beyond the bonkers acceleration and quiet-as-a-librarian ride, you have to tackle new complexities like how to tell if the car is…on. Get good and you might even master the art of driving one-pedal without puking.

Plenty of readers know what I’m talking about—and may have already aced the course. But if you’re thinking of buying an EV, or even renting one, you need to anticipate a learning curve.

Why is the Journal’s tech columnist talking about this? Don’t they have a car guy?

As you may have seen in my column and video last week, I tested five leading EV options under $60,000 in search of a second car for my family. Sitting in my garage is the winner, a leased Ford Mustang Mach-E. And yes, I am teaching my sons how to shine it up, Karate Kid style.

My EV exercise wasn’t merely about finding my next car. I wanted to clock just how much the shift to battery power is turning our cars into gadgets, not unlike smartphones and computers. Technology is upending a century-old industry.

For EV adopters, that means waving goodbye to a lot of things we’ve known about driving. I may be an expert at USB-C dongles and buried iPhone menu settings, but I am new to this hot gadget on wheels. Here are things I wish someone had told me before I went electric.

Welcome to Dri-EV-er’s Ed.

How to open the car

“Car door handles, they’re just too easy to use,” said no one ever. And yet EV makers thought they were begging for disruption.

On the Ford Mustang, you press a circular button on the door and it pops open. On the Kia EV6 and Hyundai Ioniq 5, the handle is flush with the car and pops out when the car is unlocked. With the Tesla Model Y, you need to push in the wide part of the handle then pull the longer skinnier part toward you. Thankfully, there’s a GIF for that.

The Volkswagen ID.4’s handle looks like a handle—but you don’t have to pull it out. Nestled under the handle is a sensor. Obviously, you learn how to open the door when it’s your own car, but you’ll always enjoy watching the uninitiated try to get in.

How to turn on the car

My least favourite car game? Power-button hide-and-seek.

“How to turn Tesla on” will be forever burned into my Google search history. I really couldn’t find a power button anywhere because…there isn’t one.

The Ford Mustang Mach-E has a traditional push-button. PHOTO: KENNY WASSUS/THE WALL STREET JOURNAL

Instead of a physical key fob, Tesla provides a hotel-style keycard. You can also use Tesla’s smartphone app as a key. As soon as you open the Model Y’s door, the touch screen powers on and you can operate all controls. To get it moving, you step on the brake and move the gear shifter to Drive.

Volkswagen’s ID.4 is similar: If you have the app or the key fob with you, the car powers up when you sit in the driver’s seat. Press the brake pedal and the drive system activates.

Ford, Hyundai and Kia stick to start/stop push buttons. There are key fobs, but you can also set up the apps as keys.

How to drive the car

OK, you know how traditional automatic-transmission cars creep forward when you take your foot off the brake? That generally isn’t the case with EVs. To move, you tap the accelerator. (Even in reverse, which can be a little unnerving.) As soon as you take your foot off the accelerator, the car slows and brakes on its own. You only hit the brake pedal itself if the car isn’t slowing quickly enough.

Most EVs let you do “one-pedal driving”—that is, driving with only the accelerator.

Why change how we’ve driven for so long? Regenerative braking. These brakes use motors that capture energy and return it to the battery. Hybrids often have a variation of this too, but EVs are all about it. (Here’s a deeper discussion of how it works.)

The rapid, automatic deceleration can be unsettling at first. And some people told me it can make passengers nauseous or queasy. Don’t worry! On many EVs, you can turn off the setting or minimize its intensity. The Volkswagen doesn’t even prioritise it—you have to select the mode. Its default drive mode feels much more like a regular car.

But I’m a total one-pedal convert now. In fact, when I get back in my gas-powered Volvo, I have to remember to hit the brake.

How to know if the car is running

Unlike internal combustion engines that go “vrrrrr vrrrrr VROOOM” when you start them up, EVs sound like futuristic golf carts. I’ve definitely ended up restarting the Mach-E because I wasn’t sure it was on.

The National Highway Traffic Safety Administration has set guidelines for “quiet cars” to protect pedestrians—especially people who are blind or have low vision. Under 19 mph, the cars must emit some sound. My Mach-E beeps when I reverse. The Model Y’s whirring sounds like the spaceship in “E.T.”

Some automakers use synthetic sounds to make these new cars sound old school. In the Mach-E, when I put the car in Unbridled mode and press on the accelerator, it hums like an internal combustion engine.

How to pull in for a charge

I think we can all agree on the greatest automotive invention of all time: the little arrow on the gas gauge telling you which side the fuel cap is on. There’s no standardisation for charging-port location on an EV. (This diagram is proof.) I didn’t see any handy arrows inside the cars I tested. Turns out Hyundai and Kia show a little arrow on the screen (I didn’t see it) and Volkswagen does have a cool map of the car showing the charging port, but it’s a few taps into the settings.

Tesla displays clear instructions on how to back into your Supercharger spot. PHOTO: KENNY WASSUS/THE WALL STREET JOURNAL

Again, you learn when it’s your own car. What’s not as easy to get used to? Reversing into a spot to plug in, a must at many charging stations with shorter cords.

Let me be clear, this is guidance, not a gripe fest. You’ll love driving an EV…as soon as you figure out how to get inside and turn it on.

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Meet the Couple Spending Millions to Save California’s Architectural Gems

As a Capricorn, John McIlwee considers himself a spiritual person. But when his psychic told him in late 2021 that he was going to buy another house, he didn’t believe it. McIlwee and his husband, entertainment executive Bill Damaschke, already owned a portfolio of three architecturally significant California homes, and they’d decided not to take on any more projects.

“I said, ‘Hell, no. You’re wrong on this one,’” recalled McIlwee, 56, a Hollywood business manager.

Two days later, they’d signed a contract to buy a circa-1960s house in Rancho Mirage, roughly 10 miles from Palm Springs.

Sometimes, McIlwee just can’t help himself. The idea that someone might tear down or alter a beautiful old house is more than he can bear. In the case of the low-slung Rancho Mirage home, he couldn’t stand the thought that a developer might destroy it.

“I know myself,” he said. “If I let that house fall into the wrong hands and get ruined, it would piss me off every time I drove by.”

Over the past few decades, McIlwee and Damaschke, 59, have purchased and restored multiple houses, including former President Gerald Ford’s onetime estate and John Lautner’s Garcia House, an almond-shape structure considered one of L.A.’s most significant midcentury houses. McIlwee and Damaschke typically hold their houses long term and live in them, hosting parties and sometimes allowing commercial photo shoots.

“We’re living in a world now that is unsustainable with what people are destroying,” McIlwee said. “I didn’t particularly sign up to be some weird preservationist, but I look at these things as kind of like a mark in history.”

The couple admire how billionaire grocery tycoon Ron Burkle has restored a number of important trophy homes across California, McIlwee said. In comparison, he said he and Damaschke might be considered “Ron Burkle Light.”

“Ron’s doing the $50 million things,” he said. “We’re doing the $10 million things.”

McIlwee, a California native, serves as business manager to celebrities such as “The Batman” director Matt Reeves and “Glee” star Jane Lynch. Damaschke grew up in Chicago, where he admired the local Frank Lloyd Wright houses and took high school drafting classes. He originally harbored notions of becoming an architect himself, but eventually wound up in the theater, working as a Broadway actor and later transitioning to the business side of the L.A. entertainment world. He is now president of Warner Bros. Pictures Animation, and is also a producer of Broadway shows such as “The Prom” and “Moulin Rouge,” for which he won a Tony Award in 2021.

John McIlwee creates social-media accounts for all the couple’s homes. PHOTO: JULIE GOLDSTONE FOR THE WALL STREET JOURNAL

When it comes to their homes, the two said they typically work with the same “rat pack” of professionals, including landscape architect John Sharp, interior designer Darren Brown and architecture firm Marmol Radziner. McIlwee also sets up Instagram accounts for all the homes, posting historic photos and images from their parties and photo shoots.

“They are consummate cheerleaders for their houses,” said Leo Marmol, a California architect who has helped the pair restore several homes. “Their goal is not to pour liquid amber over a historic object to kind of freeze it. It’s the opposite. It’s to invite the world in to celebrate the home.”

McIlwee said he handles most of the logistics and the execution of their projects, while Damaschke is more of a creative thinker and would spend more money if McIlwee didn’t rein him in. Though he doesn’t consider the homes as investments so much as passion projects, “I never want to lose money,” he said.

The pair mostly agree about design choices, with a few exceptions.

“Sometimes we have huge screaming fights and don’t agree on anything,” Damaschke said with a laugh. “But we end up in a good place.”

One of Damaschke’s pet peeves: McIlwee is “classic California” and leaves all the windows and doors of their homes open. “Sometimes I’ll walk through and close the shades or drapes. He’ll come right behind me and open every one of them up after I leave the room.”

Read on for a closer look at the couple’s collection.

The couple’s primary residence for roughly 20 years was the Lautner-designed Garcia House, which sits 60 feet off the ground on concrete caissons. Dating to the 1960s, the three-bedroom home is perhaps best known for its star turn in the 1989 movie “Lethal Weapon 2,” where it appeared as the headquarters for a South African drug-smuggling cartel. McIlwee and Damaschke bought the roughly 2,600-square-foot house for $1.2 million in 2002, property records show.

When it comes to architecture, Damaschke said he’s often fascinated by the narrative behind a home, which was the case here. The original owners, film composer and conductor Russell Garcia and his wife, Gina Garcia, “were real trailblazers,” he said, “because the house was unbuildable. The lot was unbuildable. So, I’m like, ‘What possessed these people to build this amazing structure against the tide of what was popular at the time?”

After living in the property for more than a year to get a feel for the space, McIlwee and Damaschke embarked on a roughly $5 million restoration project at the house, which had fallen into disrepair. They also added an ellipse-shaped pool based on Lautner’s original plans.

Living in the house forced them outside, Damaschke said, since getting from the bedrooms to the main living room requires taking an external staircase. “The flow of it actually invited you to be a part of nature,” he said.

However, “it can be overwhelming, like you’re living in an art piece,” he said. “So we worked hard to make it super cozy and comfortable, like a home.”

Damaschke also called it “the best party house in the world.” The pair hosted numerous parties there, including one for the whole cast of “Moulin Rouge.”

After years in the house, the couple was ready to move on to their next adventure, they said. Earlier this year, the couple sold it for $12.5 million to Nicholas C. Pritzker, a member of the famed Pritzker hotel family.

The Ford Estate in Rancho Mirage was designed in the 1970s for Gerald and Betty Ford after they left the White House. Located less than 2 miles from the Betty Ford Center, the rehabilitation center founded by the former first lady, the roughly 6,300-square-foot, five-bedroom house faces one of the fairways of the Thunderbird Country Club.

McIlwee and Damaschke caught their first glimpse of the property decades ago during Palm Springs Modernism Week, when they were doing research for their renovation of the Garcia house.

When the house came on the market in 2012 following Betty Ford’s death, they jumped at the chance to see it, and quickly fell in love. The house had its original décor in place, including the 7-foot-tall portrait of Betty Ford in the entryway, the red panic button in the president’s personal bathroom and the lime-green dining room, with its leafy mural and lattice chairs. They signed a contract within just 11 days of the listing going live, paying about $1.6 million.

McIlwee said he enjoys the irony that a Republican president’s home has fallen into the hands of “two gay Democrats.” He said he considers Betty Ford a trailblazer and forward-thinking for her day. “She was very sympathetic to a lot of people,” he said. “That’s the problem with American politics today. Nobody talks to each other.”

The house was designed by Welton Becket & Associates, the company behind the Galactic-style Capitol Records Building in Hollywood, in Desert style, with swaths of glass and a flat roof with overhangs. The vividly colored interiors were designed for the Fords by Laura Mako, who also designed homes for the likes of Gregory Peck and Jimmy Stewart.

The couple did significant work to the property with help from Marmol, but with the goal of maintaining the original structure. “We weren’t looking to make dramatic changes,” said Marmol. “We were actually trying to preserve the original drama of the home, while making subtle interventions to make the house more functional by today’s standards.”

Because of security concerns, the Fords had left the house relatively unexposed to the outside, so McIlwee and Damaschke added several windows and skylights. They opened up the entertainment areas to the outdoor pool and replaced the kitchen, which had been designed more as a service area than as the heart of the house, McIlwee said.

They preserved much of the interior design and furniture, including the Betty Ford portrait, which the Ford family had originally intended to sell at a Gerald R. Ford Presidential Foundation event to raise money. The couple donated to the foundation instead, they said.

“We were like, ‘No, this has to stay with the house,’” Damaschke said. “It’s a showstopper.”

The couple uses the property as a weekend and vacation getaway and frequently host friends and clients there, McIlwee said. They have no plans to sell it.

In 2021, McIlwee made a snap decision to buy a second house in Rancho Mirage, just down the street from the Ford Estate on Sand Dune Road. The move flew in the face of a conversation the couple had recently had about taking a step back from their renovation projects, which take up a lot of time and money.

The rationale? He was concerned that a developer would buy and ruin the house, a modest 1960s home that he believes was designed by the architect William Francis Cody.

“He was very anxious about it,” Damaschke said.

McIlwee chalked his anxiety up to the flipping frenzy that took over the Palm Springs and Rancho Mirage markets during the pandemic. Developers, he said, were buying houses, putting “maybe $100,000” into them, painting them white, adding a cactus and reselling. He found the bright white paint jobs especially abhorrent, preferring the traditional sand tones of desert houses.

“I wasn’t going to let that happen on my street,” he said.

At the time of the purchase, Damaschke said, he was in London and sick with Covid. “I didn’t really have a say in that one,” he said with a laugh. “He snuck it in under the radar.”

“I just said, ‘Sign this,’” McIlwee said.

They paid about $1.4 million for the three-bedroom house, which also sits on the golf course at Thunderbird. Spanning about 3,400 square feet, it has travertine floors and 16-foot sliding doors leading to the pool deck.

The house had undergone several “bad” renovations that have “glommed on to each other,” McIlwee said, and needs a lot of work. They plan on peeling back much of the block siding and basework and removing an addition that a previous owner put on the house. He estimated the cost at around $1 million.

McIlwee said they are unsure of their long-term plans for the property, but they might rent it out.

This year, the couple bought a four-bedroom Modernist house in Beverly Hills designed by the little-known Mexican architect Raul F. Garduno.

Located in the tony Trousdale enclave, the roughly 5,400-square-foot home was built in the early 1970s and has long, curving hallways, a step-down living room and a rounded swimming pool. Its design is unusual, Marmol said, because the various wings of the house seem to splay out from a single point like an off-centre windmill. The house also steps up as the site slopes down, so the house seems to respond directly to the shape of the earth.

McIlwee and Damaschke said they first saw the property when a friend who runs a design company rented it as a show house. “When Bill and I walked in, we were immediately like, ‘We’re going to get this house,’” McIlwee said.

At the time, the property was still owned by the same family it had been built for five decades prior. The original owner’s daughter, Lynne Corazza Anderson, had been fielding offers, McIlwee said, but most of the competitive ones had come from developers, who planned to tear down the house and replace it. Though he was aware of the proliferation of spec developments in the Trousdale neighbourhood, which has drawn celebrities like Jennifer Aniston and David Spade, McIlwee said he found the notion of tearing down the house “dumbfounding.” The couple decided to sell the Lautner house and use the capital to restore the Garduno house.

McIlwee convinced Anderson to hold off on accepting any of the offers for several months so that he and Damaschke had time to sell the Lautner house. Eventually they bought the Garduno house for $9.6 million in April. He estimated that they will spend at least another $3 million renovating it. They already have plans to redo the kitchen and bathrooms. They also intend to wall up some doors in the hallway to create an art corridor.

McIlwee said he also intends to amplify Garduno’s name.

“In every magazine right now, people are talking about Mexico City. Well, this is the perfect example of Mexican Modernism,” he said. “I’m taking it upon myself to give this guy some air.”

The house will be the couple’s new primary home; it is their first time living in the coveted 90210 ZIP Code. Two friends who came to lunch earlier this summer brought the couple a “Welcome to 90210” cake. “I’m still laughing about that,” McIlwee said.

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In High-Rise Happy Singapore, a Luxury Single-Family Home Bucks the Trend

A single-family home is the exception to the rule in high-rise Singapore, where most of the city-state’s 5.5 million residents live in apartments. So when it came time for Mark Tan and Stella Gwee to trade in their starter bungalow for something larger and grander, they decided to stay put, tear down and begin again on their rare 1/10th-acre lot.

In 2009, Tan, now 48, and Gwee, 46, paid 2.2 million Singapore dollars, or about US$1.6 million, for their original 1,500-square-foot house, located in a single-family enclave in Singapore’s North-East region. The couple then spent $2.6 million to replace the three-bedroom, semidetached structure, built in a Balinese-fusion style, with a four-story, seven-bedroom brick house that combines Asian and Western elements across 7,400 square feet.

In all, Tan and Gwee have invested just over $4.2 million in their new home. Multibedroom Singapore homes of a similar size could sell now for twice that.

The couple—Gwee works with her husband, a local entrepreneur—began demolition in 2020, relocating with their two children, Xavier, now 17, and Andrea, 13, to a nearby rental for the two years of construction. The family, along with dogs Furry and Brownie, moved into the finished house in early 2022.

The new home’s standout feature is a landscaped vertical courtyard, rising nearly 40 feet. “A lot of Singaporeans won’t sacrifice the space to build a courtyard like this,” says Tan, a Singapore native, who grew up nearby.

Enclosed by a skylight, the space is outfitted at the top with a large industrial fan 8 feet in diameter that is powerful enough to ventilate a factory floor. Made by Southern California’s MacroAir, the fan helps the family keep cool in Singapore’s year-round tropical weather. It is part of a $74,000 climate-control system that allows every room individual air-conditioning units.

The flora-rich courtyard, featuring an indoor koi pond and fronted by an open-air outdoor swimming pool, opens to the street at its base between the pool and the pond. The house can be closed off and revert entirely to air conditioning on especially hot days.

The open-plan first floor includes living and dining areas, and has space enough for a Steinway piano for music student Andrea. The second floor is given over to a mahjong room that doubles as a guest bedroom and a study. The bedrooms are on the third floor. The fourth floor serves as a penthouse recreation room for the kids and their friends.

The elevator makes for easy transitions, but Tan says his health-conscious wife takes the stairs.

Windows and terraces orient the house around the courtyard. Designing an expansive vertical courtyard was a challenge, says the couple’s architect Han Loke Kwang, principal in Singapore’s HYLA Architects, which specialises in upscale single-family projects (or landed properties, as locals call them). Immense vertical spaces like this are seen in commercial structures but are unusual in a residential setting, says Han.

The goal in the Tan-Gwee home, he says, was “to make sure the scale of the courtyard wasn’t overwhelming.”

Foliage—chosen to flourish in the courtyard’s shaded conditions and kept fresh with an elaborate irrigation system—and the koi pond help ornament the space. The pond gives the first floor a waterfront feel.

The couple spent $148,000 on the pool and pond areas. Tan filled the pond with $59,000 worth of top-dwelling adult koi, mostly imported from Japan, and several bottom-dwelling freshwater stingrays, costing $22,000.

Singapore, which is smaller than Los Angeles County, is a blending of cultures, bringing together East Asian, South Asian and European influences. The Tan-Gwee home has a decidedly cosmopolitan flair, combining Italian designer furniture, British and Canadian lighting, kitchen appliances from Germany’s Miele, and bathroom details inspired by vacations in Dubai and the Maldives.

The fortresslike facade, which preserves the privacy of the home, is in keeping with Asian residential models, says Han.

Many of Han’s clients have two kitchens—an open area for Western-style cooking and a closed-off Asian-style cooking space with wok stations, requiring extra ventilation. While finishing the house, Tan and Gwee decided to forgo the planned Asian kitchen, converting it into a kitchen terrace equipped with an $11,000 barbecue.

Back inside, the kitchen was outfitted with a steam oven, two conventional ovens of different sizes and a built-in Miele coffee machine.

These are booming times in Singapore. The city-state now has a per capita GDP of more than $91,000, higher than anywhere else in Asia and one of the world’s strongest residential markets.

Overall residential real-estate prices rose 7.5% between the second quarters of 2022 and 2023, with those of landed residences increasing by 9.4% in the same period, says Nicholas Keong, senior director of Knight Frank’s Singapore affiliate. Also, Singapore came in first in Knight Frank’s Prime Global Rental Index—far exceeding London, New York, Monaco and Tokyo—with rent prices rising 28% in 2022.

The couple seem to have exhausted their wish list. When you have everything from three ovens to a stingray budget, there isn’t much left. What about a home spa? “No sauna here,” counters Tan, who relies on the primary bedroom’s three air conditioners to maintain comfort. “It’s already too hot in Singapore.”

OTHER COSTS

Foundation and framing: $589,400

Electrical work: $148,000

Designer Lighting: $74,000

Elevator: $88,400

Kitchen (including appliances): $222,000

Bathrooms (7): 148,000

Brickwork/masonry: $222,000

Glazing, including windows and sliding glass doors: $222,000

Landscaping, including indoor plants and irrigation: $73,700