Luxury properties in S’pore are selling like hot cakes, Invest News & Top Stories
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Singapore may have overtaken many advanced cities, including Hong Kong, to become one of the most popular investment destinations for the rich and famous.
Over the past decade, efforts to build the country’s economic infrastructure and financial center have raised its global profile and attracted wealthy investors.
Why is Singapore attracting the super-rich?
And why are the ultra-rich buying luxury homes despite economic uncertainties?
Exponential growth in sales of luxury homes
Luxury home sales hit a new high in more than 10 years.
According to data from the Urban Redevelopment Authority (URA), private home sales in the Central Central Region (CCR) jumped nearly 25% quarter-on-quarter in the second quarter of this year to reach 1,930 units, the quarter highest since the last quarter of 2010 when 2,014 units were traded.
They climbed more than 4.5 times a year.
In the first half of this year, nearly 3,500 luxury homes were sold, surpassing annual sales from 2018 to last year.
The real estate housing segment has also seen an increase in demand, with more than 2,100 properties traded across the island in the first seven months of this year, almost triple the 780 deals a year ago.
In the high-end, well-heeled buyers snatched 272 luxury condominium units that cost more than $ 5 million in the first half of this year, the highest semi-annual transactions since the first half of 2014.
Of those condominiums, about 70 were super luxury homes over $ 10 million – one was a sprawling 611 square meter luxury apartment at Nassim Houses that sold for $ 39 million in may.
On a per square foot (psf) basis, the most expensive transaction was a 282 m² resale condominium unit at Eden in Draycott Park, which changed hands for $ 6,024 psf in March.
Top-selling new luxury condominiums include Midtown Modern, Irwell Hill Residences, Leedon Green, Fourth Avenue Residences, Hyll on Holland, The Avenir, Royalgreen, Kopar At Newton and The M.
In the secondary market, the D’Leedon, 8 Saint Thomas and Marina One residences were among the most popular resale projects in the CCR.
Who buys luxury properties?
More and more billionaires and international celebrities have flocked to buy luxury homes in Singapore, including Mr. James Dyson, the founder of Dyson; Mr. Eduardo Saverin, billionaire entrepreneur and co-founder of Facebook; Mr. Zhang Yong, the founder of the Haidilao hotpot chain, and Asian superstars like Jackie Chan and Jet Li.
The real estate market benefited in a context of wealth creation and soaring Asian wealth.
There are many new entrants to the luxury market, with budding entrepreneurs and individuals working in emerging industries like Biomedical, Fintech, and Big Tech amassing vast fortunes.
Domestic buyers are becoming a dominant force in our luxury market as their market share is growing faster than that of foreigners.
URA data shows that 75.7% or 2,315 luxury condominium units in the first half of this year were purchased by Singaporeans, up from 71.2% (961 units) in the first half of last year. .
In absolute numbers, purchases of luxury condominiums by foreigners also fell from 162 to 254 units over the same period, indicating that foreign buyers are gradually returning despite global lockdowns and higher stamp duties. high rates imposed in 2018.
The millionaire population has grown exponentially in Singapore to reach around 270,000 this year.
Singapore ranks 11th in the world in terms of millionaire density, with more than 1,300 very high net worth individuals whose wealth exceeds US $ 50 million (S $ 67.4 million).
The growing incomes of many residents have heightened their aspirations to own luxury properties.
Affluent families and wealthy millennials climb the ladder from their first purchase to owning high-end homes.
The middle income takes a piece of the pie by buying smaller luxury units.
What Attracts High Net Worth Investors?
The focus on preserving capital throughout the pandemic has prompted many investors to divert their funds to real estate properties.
The very wealthy have an incentive to buy property in Singapore because our wealth, income and inheritance taxes are considered low by international standards.
Investors also save on taxes – capital gains are not taxed and the maximum personal income tax rate is only 22%.
While our real estate market remains vulnerable to real estate restrictions and economic headwinds, a confluence of factors such as low crime rates, political stability, ease of doing business and legal transparency have cushioned downside risks.
Some see Singapore as a safe haven to deploy their capital or park their excess cash.
The intrinsic value of our properties is high and they enjoy attractive long-term capital appreciation.
According to the URA Condominium Price Index in RCC, prices have increased 4.9% over the past five years.
For those buying for rental income, the returns have also been favorable as landlords have little difficulty finding tenants in general, with our occupancy rates being over 90 percent high.
The luxury market has received another boost as more foreign investors and foreign companies look to Singapore as an alternative Asian financial center in Hong Kong.
Due to the growing uncertainties over the future of Hong Kong, an increasing number of multinational companies have deployed their resources and established local branches or head offices in Singapore.
This has led to an increase in the number of buyers from Hong Kong and China buying homes here in recent months.
As more countries gradually reopen their borders, the number of wealthy international buyers entering the luxury market in Singapore can be expected to increase further, inevitably driving up asset prices.
What properties are the super-rich buying?
Sales of luxury homes have increased alongside the increase in the number of launches in recent months.
No less than 18 upscale condominiums were launched last year, offering a fine selection of luxury apartments, waterfront villas, sky bungalows and super penthouses.
Recent luxury projects have pushed the boundaries of exclusivity and opulence.
Iconic developments like Riviere facing the Singapore River and Perfect Ten at Bukit Timah offering panoramic views of lush greenery are rare.
It is also rare to find integrated developments in prime locations where the amalgamation of residential, commercial, commercial and hotel components provides unparalleled convenience and easy access to amenities for residents.
The launch of well-designed integrated developments such as Midtown Modern, Midtown Bay, South Beach Residences and Marina One Residences has caused quite a stir. The upcoming launch of Canninghill Piers along the Singapore River (at the former Liang Court site) is also expected to generate great interest.
The luxury homes of Boulevard 88, Klimt Cairnhill, Cuscaden Reserve, Cairnhill 16 and Nouvel 18 in the more upscale area of ââOrchard Road are popular with discerning investors.
Some of these launches are part of the last tranche of âblock feverâ outbreaks of 2017.
New properties in prime locations, especially freehold homes or super luxury homes, are hard to find.
Some may think that if they were to miss the opportunity to buy now, they may have to wait another eight to ten years for the next collective selling cycle to purchase such units.
We have also observed that more and more investors are purchasing homes in Novena and Orchard as a group of leading hospitals equipped with state-of-the-art facilities and world-class diagnostic, treatment and rehabilitation services have attracted many medical tourists and wealthy people to relocate and search. processing here.
Look ahead
The high-end market will benefit as the super-rich continue to emerge in Asia and more people disperse their wealth and assets abroad as new taxes are imposed on the rich in some countries.
The moderate pace of government land release and the tight supply from collective sales will likely keep luxury homes attractive in prime locations.
With Singapore’s economy recovering strongly, we expect consumer confidence and luxury home sales to pick up further.
⢠The author is senior vice president of OrangeTee & Tie Research and Analytics.
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