Hankering for history boosts castle sales

Think the U.S. real estate market has been strong? Well, the foreign castle market has done better. Chateau brokers say business has jumped 20 percent during the past two years, boosted by everything from the euro (it's been weak) to the Internet (it's made properties easier to find) to comparatively low prices.

For some, a house isn't worth buying unless it has a moat, according to Alexander Kraft of Sotheby's International Realty. These people, he said, "want to buy a bit of history, even if it's not theirs."

While the number of sales remains small, brokers say the hottest markets are in Italy and Austria, where a picturesque schloss runs into the millions. But in many other places, a castle can be purchased for surprisingly little. One South African manse is going for $365,000, but with the armor, antiques and rugs, it costs an additional $98,000. In France, the government will help pay the owner's fix-up costs. True bargain hunters, however, look east. In the former East Germany, some rundown castles are available for a single "symbolic" euro (although new owners must agree to invest $1 million or more for repairs). And in Poland, a palace can be had for about $80,000.

Kraft warns his clients, however, not to expect all the comforts of home.

"It's not unusual to have 50 bedrooms, one bath and no roof," he said, pointing out that drafts, leaks and vermin are also to be expected.

Heinrich von Hanau, a Miami developer, said castle life is not all it is cracked up to be. (He'd know, he was born Prince Freidrich Wilhelm Hanau Count Chaumburg.) Memories of his family's 15th-century Austrian palace include dark, spooky hallways, and not knowing whether he'd get hot water -- or any water -- when he turned on the tap.

"Owning a castle is like buying a big yacht," he said, with big costs for staff and maintenance. Consider: the owner of a 27,000-square-foot palace in Morocco reports that the electricity costs are $6,000 a year.

The castle market has been strong before, especially during the '90s, so why the rush now? Analysts point to the weak European economy, which has lagged behind the American economy, making exchange rates favorable. And while properties in major cities have shot up in price, castle prices have not climbed at the same rate, making them relative bargains. Finally, many buyers want to keep their money out of stocks, so they are turning to real estate with a pedigree.

Despite all of the headaches, some owners say they are sold on castle life. An American woman spent $5 million for her latest chateau, a palace near Versailles, then put in $1 million more to modernize it.

"It's a great value compared to what the same money would buy back home," said the woman, who owns two 17th century French castles. "They make me feel like a queen."

Real Estate home