After 17 months of misery, luxury home prices in London are finally up on an annual basis. Banking and hedge fund industry professionals are spending money again, largely because they're being paid again. Homes with values of above $1.6 million appreciated 1.6 percent in November compared to the same month last year. This was the first annual increase since June 2008. Nonetheless, prices remain 15 percent lower than the March 2008 peak. From October to November, prices grew 1.2 percent.

Liam Baily, head of residential research at Knight Frank, told Bloomberg News, "Anecdotal evidence from across our offices suggests that City money is becoming more apparent as we get closer to the end-of-year bonus season," continuing, "Demand from senior management is driving the market." Bonuses could wind up growing by 50 percent this year to 6 billion pounds in London's largest financial districts, and professionals in this industry are responsible for half the city's demand for luxury homes.

For homes at prices of more than $16 million, the price increases are even better: 1.9 percent from October to November this year. Residences in Chelsea, Kensington and Knightsbridge got the biggest boosts.

This has led to a bit of optimism. Luxury real estate could reach May 2008 levels by 2012, up to two years earlier than expected.

The Phillips de Pury auction on Thursday night raked in what once would have come from a single painting. Despite parading out pieces by Andy Warhol, Jeff Koons and Richard Prince, the sale was good for a mere $7 million, with individual lots moving for prices in the hundreds of thousands of dollars. Thirty-nine went under the gavel, and eight didn't sell.

The Chelsea auction house lacks the savvy, knowledge and reach of Sotheby's and Christie's, so it had to lean on British art collector Charles Saatchi, who has agreed to complete most of his transactions through Phillips de Pury. In trade, subsidies from the auction house help keep access to Saatchi's gallery free.

Roughly a dozen of the lots came from Saatchi, while the others are said to have been rejected by Sotheby's and Christie's. In general, the pieces were "pretty skimpy," according to Manhattan art dealer Edward Tyler Nahem, who observes that the auction house "did pretty well with what they had."

Japanese artist Yayoi Kusama was the top seller, with her painting "Infinity Nets (T.W.A.)" busting past its high-end presale estimate of $400,000 and settling at $842,500 (including fees). Kusama's performance follows a well-hyped exhibition at the Gagosian Gallery this year.

Oh what a week to be Roman Abramovich. As my colleague Jared Paul Stern reported, Abramovich had to cancel his Aspen New Year's Eve party. Now rumors are surfacing that Abramovich may be so crunched by the financial crisis he is looking at selling either his Chelsea soccer team or his megayacht Pelorus. It seems likely that he would be selling the yacht anyway if he is still going to be taking delivery of his planned $350 million megayacht but perhaps the economy has hastened that decision. No other Russian billionaire is as tempting a subject for speculation so it's hard to believe much of the news of his potential comings and goings without a listing or other proof.

Should Abramovich find himself with a bit of spare change, the country of Latvia has an interesting offer, they want him to buy them. For around $10.7 billion he could have an entire country at his disposal. Over 400 Lativans have signed a letter addressed to Abramovich touting the country's benefits of hard-working people, a clean environment and"plenty of space to dock your yacht."

Sometimes a house is just where someone lives. Other times a person's home becomes an extension of personality. Today's home in London, England belonged to Severin Wunderman, a man well-known to those with a love of watches. Wunderman, who died this past summer at the age of 69, built the Gucci watch franchise and then later went on to buy the Swiss brand Corum. Ever wonder about the origin of Corum skull designs? A peek into Wunderman's library might hold the answer, skulls are proudly displayed on the shelves. The eight-bedroom home in the Chelsea area is deliciously quirky, full of both grandeur and eccentricity and decorated with art that reflects Wunderman's varied interests. The home also includes a gothic "hobbit house" in the garden. It was originally listed at £15.5million and now the asking price is £10.5million.

[via This is London]

Experience more lush living in luxury homes and mansions or see the stars living large with celebrity homes galleries at AOL Real Estate.

No matter the economy or state of the world, New Yorkers like their luxury, and one of the finest recent examples of upscale living is Chelsea's The Caledonia. Expertly built and managed by The Related Companies, this new hybrid building (includes condo owners and renters), which overlooks the High Line, already is sold out in its ownership division. As of a few weeks ago, however, rentals were still available. Sizes range from studio to three-bedroom, and some of the 190 units have terraces.

I thought I had a nice apartment until I saw the lobby, let alone the units! Eco-friendly bamboo floors and cabinetry, top-end appliances, large windows, key fob entry, spa-like bathrooms, and the Holy Grail of the NYC dweller -- a washer and dryer in each unit -- make me want to sell my place and move right in. And if I lived in a Related building now, I could easily do that, as Related makes it easy to transfer to another company unit within NYC, or even in another city.

Looking at Stephen Dorff's apartment in Chelsea it's hard not to notice right away that there is a fur-covered couch in the living room. It's a sexy little place and as the Real Estalker reports, Dorff who is perhaps best known as playing sexy vampire Deacon Frost in Blade has done a very bachelor-friendly renovation. We first heard about this place back in 2006 when Dorff picked it up for $1.65 million.The duplex penthouse has one bedroom, two bathrooms and an 800-square-foot roof terrace. The home has a sleek gray color scheme with natural wood accents, stainless steel appliances (as the Real Estalker points out, the washer and dryer are also in the kitchen) and a blindingly shiny black tile bathroom. The terrace includes a storage area, wet bar and an outdoor shower. It is listed at $3 million.

Experience more lush living in luxury homes and mansions or see the stars living large with celebrity homes galleries at AOL Real Estate.

The homes at Chelsea Enclave are finally for sale.

Chelsea Enclave is a spectacular haven in the heart of historic Chelsea, NYC, hidden between 20th and 21st Streets. The brand new new building's garden, The Close, expands to the west of 9th Avenue. The Close features wrought iron benches, stone footpaths, crocuses, daffodils, tulips, and wisteria, and as you can see above, the effect is a serene escape from the surrounding bustle of the city that never sleeps.

Chelsea Enclave, developed by The Brodsky Organization, has 1-4 bedroom residences (including 9 penthouses) from $1.4 to $12 million. The still-available $6.2 million penthouse has 4 bedrooms, each with an ensuite bathroom, a powder room, a breakfast room, and a dining alcove totaling 3,176 square feet with views of the North, South, and West.

See our gallery below for a look inside these most-wanted living spaces.

Jay-Z recently stepped down as the head of Def Jam records, perhaps because he's got a new project, a chain of five-star hotels. Various sources are reporting that he recently paid $66 million for a piece of land in Manhattan's Chelsea neighborhood in order to create the first of his new J Hotels. Jay-Z, born Shawn Carter, already as a clothing line (Rocawear) as well as his own bar chain, the 40/40 Club (he opened the Las Vegas 40/40 Club over New Year's) so this deal seems more secure than some of the others we've seen, such as Nicky Hilton's attempt at the hotel business.

The Metal Shutter Houses in the West Chelsea of New York City take a look usually seen when storefronts close down for the evening and roll down metal garage-door-like shutters and makes it high end. The nine-unit condo project designed by Japan's Shigeru Ban was inspired by the metal shutters on industrial buildings. The mechanized shutters have horizontal perforated slats that allow the resident to see out when closed but block out the city's prying eyes. When the shutter rolls up it reveals a terrace which is separated from double-height living rooms by windows that can also be raised to create one large indoor/outdoor space.The units range from three-bedroom, 1,950-square-foot duplexes with terraces to four-bedroom, 2,700-square-foot duplexes with terraces and one four-bedroom duplex penthouse which has 3,319 square feet and 1,963 square feet of outdoor space including private roof deck. The units start at $3.6 million and the penthouse, shown above, is listed at $10.5 million.

[via NY Post]

When you think of TIte Street in Chelsea, London you might think of the historical houses such as Oscar Wilde's home or James Whistler's studio. The area is famous for walking tours that let you drift back into Londons past. But at 60 Tite Street it's a whole other matter. A completely immaculate modern home is for sale at this address. The five bedroom home is done in the muted neutral tones usually found in a boutique hotel. It's a bit like a Crate and Barrel catalog come to life but it still has a certain charm due to the space it inhabits. It is listed at £6,950,000. After the jump, a rhapsody in brown.

Russian billionaire Roman Abramovich has yachts to spare but did he really give a friend his 328-foot yacht Le Grand Bleu? The Sun reports that Abramovich handed the yacht, which is worth over $138 million, over to his  business lieutenant Eugene Shvidler as a thank you. Abramovich had problems with the yacht last fall but surely that's no reason to ditch this beauty and while I'm sure Shvidler is a fine man and a good friend, I still sense there is another reason. There can only be one answer, Abramovich needs room in his stable for an even grander ship.