Real estate expert Mokhtar Jabl said with inflation running at 9.1 percent in America even the mega-rich – like the Duke and Duchess of Sussex – are “feeling the pinch”. The couple bought the stunning nine-bedroom and seven-acre property in Montecito, California, in June 2020 where they now live with their two children, Archie Mountbatten-Windsor and Lilibet Diana Windsor.
The $14.7million (£11million) home was once available to rent via Giggster for an incredible $700 (£537) an hour for productions.
Officially known as Chateau of Riven Rock, it features nine bedrooms and 16 bathrooms as well as a spa, two-bedroom guest house, library, games room, arcade, cinema and private gym.
And while the highly-desirable part of South California is famed for attracting A-list celebrities, with the couple boasting neighbours including Oprah Winfrey, Ellen DeGeneres and Katy Perry, Orlando Bloom and their daughter Daisy Dove, its property market has not been immune from rising inflation which has cooled property prices across the US.
But Mr Jabli, the founder and CEO of luxury home rental firm The Nightfall Group, said inflation had “bitten a gigantic chunk out of the property market”.
According to data from Realtor.com, the median property price in Montecito nosedived from £9.12million ($11.0625m) in May to £4.33m ($5.250m) in July – equating to around a 45 percent drop.
The astonishing fall comes as record-low interest rates enjoyed since after the 2008 crash have steadily risen in recent months as the US Fed struggles to bring down inflation which is running at the highest levels for decades.
At the end of July it raised its benchmark rate 0.75 per cent points for the second consecutive month to a range of 2.25 per cent -2.5 per cent.
Mr Jabli said that while it will be good news for savers, the flipside is that credit is more expensive – reducing the amount that people can borrow and effectively throwing cold water on the formerly red hot market.
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“It’s only a matter of time before it is back under control and when that happens, Harry and Meghan’s mansion will be back worth $13m.
“And it’s only a matter of time before it surpasses that value and starts making them a profit.
“If they sold it today or tomorrow they’d lose money which is why they’d be crazy to do so.
“Unless they absolutely had to, why would they?
“If they do want to sell it all they’ve got to do is sit on it for a few years until the market rebounds and they’ll be in the money.”
Mr Jabil – who has created a portfolio of luxury properties since moving to California in 2016 – spoke shortly after the couple’s home was the subject of two intruder scares in just 12 days.
Police were called on both occasions on May 19 and 31 amid reports that someone had gained access to the property.
Both intrusions were recorded as trespassing, property crimes and “suspicious circumstances” by police, according to reports.