Singapore property still a top draw for Asia's ultra-rich

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http://www.businesstimes.com.sg/real...ias-ultra-rich

Singapore property still a top draw for Asia's ultra-rich

Thursday, March 2, 2017

by Lynette Khoo
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@LynetteKhooBT


SINGAPORE's property market remains high on the agenda of Asia's ultra-rich, notwithstanding the cooling measures still in place.

Its commercial properties are a top consideration for Asian ultra high net worth individuals (UHNWIs) keen on this asset class, moderately ahead of the UK and the US.

Singapore's residential market is the second most likely place for Asian UHNWIs to own an overseas home, after the UK, according to the Attitudes Survey in Knight Frank's wealth report out on Wednesday.

Such findings came on the back of last year's 3.4 per cent rise in Singapore's luxury residential prices - luxury units being defined as at least S$2,500 per square foot in prime districts 1, 9, 10 and 11.

There are some 46,080 UHNWIs, each having a net worth of over US$30 million excluding their primary residence residing in Asia-Pacific, based on data from New World Wealth.



Knight Frank Singapore head of consultancy and research Alice Tan noted that Singapore continues to appeal especially to the Asian community to live, work and set up businesses. Districts 9 and 10 are still highly favoured by the ultra wealthy given their prime location, close proximity to high quality amenities and schools.

The overall slide in property prices due to the government's cooling measures has also enhanced the value proposition of Singapore property, with demand for property gradually returning as seen in the improved transaction volumes last year, she said. "Our 15 per cent additional buyer's stamp duty on foreigners is looking cheaper compared to Hong Kong's 30 per cent," said Ms Tan. Meanwhile, there is risk of China introducing more property cooling measures to rein in prices, especially in first-tier cities.

The Attitudes Survey is based on responses from almost 900 of the world's leading private bankers and wealth advisers, representing over 10,000 clients with a combined wealth of around US$2 trillion.

Among investable asset classes, real estate investments came top of the list for Asians' wealth allocation at 29 per cent compared to the global average of 24 per cent. With the ultra-rich citing wealth preservation as the most important factor in investment decisions, Singapore's attraction as a safe-haven amid global uncertainties will continue to play out, Ms Tan said.

Chinese nationals were the top foreign buyers in the residential market here since Q4 2015. Ms Tan is predicting sustained buying interest from Chinese nationals despite recent curbs on capital outflows. This, coupled with improved buying interest from Malaysians and Indian nationals this year, could raise the proportion of foreign home buyers to 28 per cent this year from 25 per cent in 2016, she added.

Knight Frank Singapore executive director and head of residential services Tay Kah Poh noted that Singapore's 23rd ranking on the Prime International Residential Index (PIRI) that tracks the value of luxury homes in 100 key locations worldwide, on the back of the 3.4 per cent rise in luxury home prices, reflects "the immense value proposition that it has to offer to the ultra-wealthy". It was in 81st position for 2015 due to a 2.1 drop in luxury home prices that year.

The value proposition becomes more pronounced when seen vis-a-vis the surge in prices in key cities in China and Australia.

Luxury home prices in Shanghai defied property cooling measures with a 27.4 per cent surge last year, putting the city at the top on PIRI; two other Chinese cities Beijing and Guangzhou were ranked second and third for the respective 26.8 per cent and 26.6 per cent growth. London's 6.3 per cent drop in luxury home prices translated to a 92th position on the PIRI.

Knight Frank noted that it was the 3 per cent hike in stamp duty for additional homes introduced in April 2016, rather than the UK's decision to leave the EU, that reined in demand in London. But the tail end of 2016 saw an uptick in sales volumes and improved sentiment as the market readjusted to the new tax burden.

The property consultancy also selected 20 prime city markets and calculated, based on the typical luxury residential value for each city and the exchange rate at the end of 2016, how many square metres US$1 million can buy in each city.

As of end-2016, the most expensive prime homes - generally defined as the top 5 per cent of each market by value - turned out to be Monaco, Hong Kong, New York, London and Geneva, followed by Singapore.

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http://www.straitstimes.com/business...es-in-uk-spore

Asia's ultra-rich favour homes in UK, S'pore

Mar 2, 2017

Lee Xin En


Singapore has cemented its place as one of the top destinations for ultra-wealthy Asians looking to invest in a residential property.

According to the Wealth Report compiled by property consultancy Knight Frank, Singapore is No. 2, after Britain, for ultra-high net worth Asians keen to buy property.

This is significant as these investors tend to allocate most of their wealth to real estate investments, compared with other asset classes such as equity investments and collectables like wine and cars.

The survey defined ultra-high net worth individuals as those with a net worth of US$30 million (S$42.3 million) or more, not counting their primary residence.

Knight Frank Singapore's head of consultancy and research, Ms Alice Tan, said that she expected the proportion of foreign home buyers in Singapore to increase from the current 24.7 per cent to between 25 per cent and 28 per cent this year.

"We see interest coming from Indian and Malaysian buyers. Even though the ringgit is weakened, they may look at capital preservation as the Singdollar is stable," she said.

Despite capital controls in China, Ms Tan added that she expected fairly consistent demand from Chinese buyers.

She attributed the continued interest to the slower rates of Singapore's property price growth compared with double-digit price growth in cities in China, Canada and Australia.

Personal security also emerged as the top concern for ultra-rich Asians, which would make Singapore's stable institutions and conducive business environment all the more attractive, she added.

Despite global uncertainty last year, the ranks of the ultra-rich bucked the declining trend from the year before.

While Asia saw a decline of 3 per cent in the number of ultra-rich in 2015, last year recorded an increase of 8 per cent.

Among Asian nations, China saw a 10 per cent growth while Vietnam posted the fastest growth rate of the ultra-rich globally at 18 per cent.

The report, in its 11th edition, said the dramatic growth of the ultra-wealthy in Asia could position the region to overtake North America as the hub of ultra-high net worth individuals.

There are currently 73,100 ultra-wealthy individuals in North America, while Asia has about 46,000. This gap is expected to close to between 7,000 and 8,000 by 2026, as the number of ultra-rich in Asia is expected to grow by 91 per cent, while that of North America rise by 31 per cent.