Asia’s ultra-rich rank S’pore as region’s top choice for luxury homes

Demand for private homes in Singapore is expected to recover in 2021, according to a Knight Frank Wealth Report.PHOTO: ST FILE

SINGAPORE – Singapore has become one of the world’s most sought-after locations for buying investment homes as its safe-haven reputation has been further strengthened by successfully managing the coronavirus pandemic and supporting businesses.

According to Knight Frank’s Wealth Report, while private home prices in Singapore’s prime districts dipped 0.2 per cent in 2020 as travel restrictions kept foreign buyers away, demand is expected to recover this year as such properties remain relatively affordable, and as the vaccine roll-out continues and borders reopen.

Knight Frank’s survey of over 600 private bankers, wealth advisers, intermediaries and family offices, found “a change in strategy” by ultra-high net worth individuals – those whose net wealth exceeds US$30 million (S$40 million) – due to global uncertainty in the wake of the pandemic.

“As a result, they are investing in additional homes domestically wherever they can, followed by second homes in cities and countries that best fit their needs in the new normal,” said Ms Victoria Garrett, head of residential property in Asia-Pacific at Knight Frank.

Singapore’s luxury residential market is the top Asian territory of choice for the ultra-wealthy in Asia, after the UK, US and Australia, noted Mr Nicholas Keong, head of residential international project marketing at Knight Frank Singapore.

“Home buyers from India, Japan, Malaysia and South Korea rated Singapore in their top five locations when considering investment homes abroad. The manner in which Singapore’s government was able to financially support businesses as well as put in place measures to control the spread of Covid-19 further enhanced Singapore’s reputation as a safe bastion for investors,” he said.

This could augur well for luxury home prices this year, with 26 per cent of those surveyed planning to buy a new home in 2021, up from 21 per cent in 2020. “This demand could help fuel price rises of up to 7 per cent in key markets” this year, the report said.

Moreover, unlike Auckland, Shenzhen, Seoul and Manila, where average home prices ended between 10 per cent and 18 per cent higher last year, prices of prime homes in Singapore dipped 0.2 per cent and sales plunged 20 per cent due to a lack of new launches and as travel restrictions kept foreign investors away.

Nevertheless, Singapore continues to be an oasis for investments due to its stable political environment as well as the extensive measures to mitigate any recurrence of the outbreak, the report said.

This is borne out by a 10.2 per cent increase in the number of ultra-high net worth individuals in Singapore last year to 3,732, despite the recession and an overall drop in median household income from work of 2.4 per cent, Ms Wendy Tang, group managing director of Knight Frank Singapore, said.

“Given that South-east Asia has one of the fastest-growing middle-class demographics in the world, Singapore is well positioned to ride the growth. As such, the number of ultra-high net worth individuals in Singapore is forecast to grow by about 31 per cent between 2020 and 2025 to 4,888,” she said.

Mr Leonard Tay, head of research at Knight Frank Singapore, added: “Singapore also has a smaller ultra-high net worth individuals population compared against other Asian countries in the list. With a lower base, a relatively decent growth in quantum results in a higher percentage increase.”

“Source: [Asia’s ultra-rich rank S’pore as region’s top choice for luxury homes] © Singapore Press Holdings Limited. Permission required for reproduction”

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