17% of the world's ultra-rich want new homes in Singapore

This is despite the 9.1% price growth in the city’s luxury properties.

17% of the world's 198,342 ultra-high net worth individuals (UHNWI) — with a net worth of at least US$30m — prefer to buy a new home in Singapore in 2019-2020, Knight Frank revealed. According to its wealth report, about 23% of UHNWIs in Asia and 8% in Australia said they prefer to buy a new home in the city.

“Singapore is an attractive destination to both local and foreign ultra-high net worth individuals, offering security, a world-class education system and developed infrastructure and medical facilities. Notwithstanding, many high net worth individuals already own properties in Singapore and may seek properties in other countries for risk diversification,” Knight Frank Singapore’s head of research Lee Nai Jia commented. About US$1m could buy 36sqm of prime property in Singapore.

The report also found that 15% of UHNWIs are likely to invest in Singapore property excluding their first and second homes in 2019-2020. About 20% of the ultra-rich from Asia and 5% from Australia said they want to invest in new property in the city.

Singapore remained attractive despite the continued ascent of Singapore luxury home prices, which rose 9.1% in 2018 — the highest point of its market cycle. The city recorded the seventh-highest growth rate globally according to Knight Frank’s Prime International Residential Index (PIRI 100).

The index, which tracks the movement of luxury prices across the world’s top residential markets and covers major financial centres, gateway cities and second home hotspots, found that a slowdown in Singapore’s property market is likely amidst solid economic fundamentals which could prevent prime price growth from entering negative territory.

“A reduction in Seller’s Stamp Duty in 2017 was interpreted by some as a change in policy sentiment, prompting a surge in demand, but a further tightening of stamp duties for nonresidents and developers in 2018 has halted the market,” Knight Frank said. 

“Cooling measures implemented unexpectedly in July, including higher stamp duties and tougher loan-to-value rules, worked to stop the incipient house price recovery in Singapore. Whilst we expect the market to see some improvements in 2019, prices are unlikely to rise this year,” Lee said.

The city-state has been subject to more than 15 macroprudential regulations since 2010, and 2018 was no exception. Going into 2019, Knight Frank forecasted that Singapore may see prices remain static, as buyers adjust to new taxes and restrictions.

Meanwhile, Manila’s luxury residential market growth which jumped 11.1% allowed it to take the top spot in PIRI 100, followed by Edinburgh, Berlin, Munich and Buenos Aires. Rounding off the top ten were Mexico, Boston, Madrid and San Francisco.

Overall, the value of the 100 luxury residential markets tracked by the index increased on average by 1.3% in 2018, down from 2.1% in 2017, which is its lowest rate of annual growth since 2012, Knight Frank noted. “This decline comes as little surprise,” the report’s authors noted. “As we learn to live without the ultra-low interest rates that have supercharged real estate markets globally since 2008, lower price growth is an inevitable consequence of the shift in monetary policy. 

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Banks should have enough buffers and find climate transition risks manageable.
The initiative is expected to improve the operating environment for SG businesses.
This includes the upgrade to the latest data acquisition and control system.
A potential incentive fee of up to $18m may be applied. 
This is part of the group’s efforts to spearhead maritime decarbonisation.
This is higher compared to September's retail sales YoY increase at 6.8%.
Restaurants experienced the most YoY decline at 24%. 
Over 40 companies were recognised in the 7th edition of the awards programme.
VTL scheme to proceed “without change” amidst detection of Omicron variant in Korea.
SATS, Sembcorp Industries, and the SGX led the index.
Birth rates in the country have declined since the pandemic began.
It represents a premium to the property’s book value of approximately $20.6m.
The move will be part of the redevelopment of the Central Mall properties.
It also waived its right to walk away from potential material adverse effects.