S'pore a top choice for residential property investment among the ultra wealthy

SINGAPORE remains a favoured destination for property investments among the world's ultra wealthy, taking fifth spot based on an overall global ranking published in The Wealth Report 2018 by Knight Frank.

Among Asian investors, it is the third most favoured country, after the UK and US. Among Australasians, it also takes fifth spot. The rankings are taken from an attitude survey within the report.

Separately, the report also features the City Wealth Index, a ranking of the cities that matter most to the ultra wealthy. Singapore also took fifth spot, the only Asian city among the top five. The index aggregates scores based on four parameters - wealth population and its rate of growth, property investments worth at least US$10 million, lifestyle, and future economic performance.

Singapore scored particularly well on the lifestyle component, where it was ranked third-highest alongside Chicago, and after New York and San Francisco.

The lifestyle component included the number of luxury hotels, the number and quality of leading restaurants, average visitor spend, and education measured by the number and quality of universities in the city.

Nicholas Holt, Knight Frank's Asia-Pacific head of research, said: "Asian cities took three of the top 10 spots in the City Wealth Index. Singapore's standout ranking is a reflection of its strong performance across all criteria, with an especially impressive showing in lifestyle, considered increasingly important by the world's international community."

In terms of expected outbound residential property investments, Singapore was among the top five destinations cited by respondents in India, Malaysia, Philippines and Australia. For Chinese respondents, however, it was not among the top five.

On the Singapore market, Alice Tan, Knight Frank director and head of consultancy & research, noted that there has been a significant uptick in purchases by foreigners in the luxury segment in the Core Central Region. The latter includes Districts 9, 10, 11 and Sentosa.

The hike in buyer's stamp duty (BSD) that was imposed following the Budget last month is unlikely to affect property purchases below S$2 million, said Ms Tan. The stamp duty was raised from 3 to 4 per cent on the value of a home in excess of S$1 million. "It may have a greater impact on the luxury segment because we're looking at a S$5 million or S$20 million home. It will have a certain bearing on some locations on the fringes of Districts 9 and 10. But for most prime locations like Nassim or Ardmore, the ultra wealthy may not see the BSD as a deterrent."

Tay Kah Poh, Knight Frank head of residential services, said he remains optimistic about the prospects for the luxury home segment. "The pickup (in 2017) has been quite firm. Statistics show the ultra rich have been picking up bargains in the high-end sector a year before recovery...

"Even though there are question marks about interest rate hikes, the environment seems very sanguine and on the whole, economic growth has been strong. Land bids for some prime properties suggest there will be cost pressures on unit prices of launches, which may even break records. We'll watch and see."