Singapore’s priciest homes rise 144% in value over five years

Business Times: Fri, Sep 23
(SINGAPORE) Billionaire homeowners in Singapore have seen the value of their properties increase 144 per cent in the past five years – the highest price hike globally. This brings the average cost of Singapore’s ultra-high-value homes to £1,…

(SINGAPORE) Billionaire homeowners in Singapore have seen the value of their properties increase 144 per cent in the past five years – the highest price hike globally.

This brings the average cost of Singapore’s ultra-high-value homes to £1,000 (S$1,988) per square foot (psf), eighth out of the 10 cities ranked, according to international real estate adviser Savills.

At the top end of the spectrum in terms of price growth, ‘new world’ economies like Singapore, Mumbai, Moscow and Hong Kong saw increases of 144 per cent, 138 per cent, 110 per cent and 83 per cent respectively from December 2005 to December 2010, reflecting the geography of new wealth generations and the creation of new billionaires over the period.

On the other hand, Shanghai (another ‘new world’ location) saw prices of its super prime property grow only 32 per cent.

‘This suggests (that the) underperformance at the very top end of the market is undoubtedly linked to China’s closed market, where billionaire demand is solely domestic – unlike the rest of our cities, which are also fuelled by international buyers (excluding Tokyo),’ said Savills.

‘Although the numbers of Chinese billionaires are growing rapidly, the middle classes are greater in number and have fuelled price growth in the mainstream markets first. Perhaps prices in the billionaire segment will play catch-up with substantial growth to come.’

While ‘old world’ super prime markets – Tokyo, London, Paris, Sydney, and New York – recorded lower growth, they continue to dominate the top half of the table in terms of overall price.

This makes them attractive investments, given their relative price stability, coupled with political stability, said Savills, citing Sydney as an example.

‘At the foot of the table, Sydney still offers great value and is extremely well located to take advantage of Asian wealth if and when its policies restricting international buying are relaxed,’ Savills noted. The average price psf of Sydney’s ultra-high-value homes came in at £590 psf.

In a league of its own for super prime prices, Hong Kong led the list at £6,700 psf, followed by Tokyo and Paris at £5,190 and £3,270 psf respectively.

‘Global billionaires can make any country their home, and often have several different residences across the globe. Most will seek a base where they are doing business,’ said Yolande Barnes, director of residential research at Savills.

‘This has the effect of funnelling global equity into the very best residential real estate – a rare commodity in any city. Billionaire buyers demand the best international standards of accommodation and are paying prices to match, creating a super class of global billionaire homes.’

Overall, the value of ultra-prime properties climbed 65 per cent in the past five years; during the first half of 2011, billionaires saw their homes increase 10 per cent in value, compared with just 6 per cent for the wider housing market in the 10 cities.

In August, Savills revealed that Singapore was the fourth most expensive city based on a basket of properties required to house a group of executives. The properties in the basket rose an average of 92 per cent from December 2005 to December 2010.
Source: Business Times © Singapore Press Holdings Ltd

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