SINGAPORE – Singapore ranks among the top markets for ultra-prime residential property transactions in 2022 alongside cities such as London and New York, according to real estate consultancy Knight Frank.
In its Wealth Report released on Wednesday, Singapore ranked sixth among the top 10 cities in the high-end activity index, with 18 ultra-prime property sales valued at more than US$25 million (S$33.6 million) each and 121 super-prime property sales valued at more than US$10 million each.
This comes even though transaction volumes of prime homes eased from the most recent high in 2021.
London topped the chart with 43 ultra-prime and 223 super-prime transactions. New York was next, with 43 ultra-prime and 244 super-prime sales, while Los Angeles chalked up 39 ultra-prime and 225 super-prime deals.
Hong Kong came fourth, with 28 ultra-prime transactions and 125 super-prime deals. Hong Kong is also the second most expensive residential market, with 21 sq m purchased for every US$1 million.
Monaco ranks as the most expensive residential market, with 17 sq m per US$1 million. Singapore currently ties with London for the fourth position, with 34 sq m of prime residential property bought for every US$1 million.
“Singapore continues to attract high-net-worth home buyers both domestically and from all over the world,” said Mr Nicholas Keong, Knight Frank Singapore’s head of private office.
Mr Keong believes Singapore is seen as a safe haven by high-net-worth individuals, as the Government has kept the economy and public health stable even in a period of global economic uncertainty and political tensions.
This year, Knight Frank expects a 4 per cent increase in prime prices in Singapore amid upward pressure on property prices, fuelled by a rising number of wealthy individuals.
It noted that prime home prices in Singapore increased by “a relatively modest” 3.9 per cent in 2022, coming in at 58th place in the real estate consultancy’s Prime International Residential Index 100 (Piri 100).
While the country is up from the 70th position in 2021, prime prices continued to lag behind the overall growth of 8.6 per cent for Singapore private residential properties, as well as behind the average increase of 5.2 per cent across residential cities in the Piri 100.
Knight Frank Singapore head of research Leonard Tay attributes this to the Government’s efforts in reining in runaway prices, with the measures preventing prices from overheating beyond the pace of economic performance and household incomes.
Travel restrictions imposed in other places such as China and Hong Kong have also limited foreign investors’ interest in purchasing homes in Singapore until early 2023, Mr Tay said.
He believes it will take time before the easing of border restrictions translates into transaction activity in Singapore’s prime home market, given the dampening effect of additional buyer’s stamp duty for foreigners.
With the price gap between the prime areas and other areas of the island narrowing, interested investors can also find opportunities in Singapore’s pool of luxury properties before prices start to rise more substantially in the core central region, Mr Tay added.
Ms Christine Li, Knight Frank Asia-Pacific’s head of research, believes asset repricing, perceived value opportunities and an expected economic rebound in the Asia-Pacific will make 2023 a “pivotal” year for real estate in the region.
She also anticipates the return of Chinese buyers boosting transaction volumes for prime residential properties in Asia-Pacific cities. THE BUSINESS TIMES