Knight Frank Wealth Report 2013: Singapore property slung, China rising

Over five years, Singapore’s prime international residential market is down 2.9 per cent. In contrast, Hong Kong’s is up 36 per cent

Knight Frank’s new Wealth Report reveals that Singapore’s luxury and business property markets have taken a significant hit over the past five years, suggesting the wealthy are seeking bases elsewhere in Asia and beyond.

Over the five years to Q4 2012, the city state’s prime international residential market is down 2.9 per cent, according to the report’s annual Prime International Residential Index. In contrast, Hong Kong’s is up 36 per cent, despite a 15 per cent stamp duty for foreign buyers, and Shanghai is up 42 per cent.

Singapore’s prime international office market has suffered similarly, down 36 per cent over the past five years, while in contrast Beijing’s enjoyed growth of 97 per cent.

One conclusion which can be drawn from this is that China is succeeding in its attempts to make itself and Hong Kong more attractive to investors and HNWs than Singapore, indicating perhaps a decisive shift in regional power. Another is that Singapore’s market was already fairly valued and it is China which is catching up.

MORE GENERALLY, THE PIRI reveals a polarised global market for residential markets, and shows that popular European second-home destinations continue to face major difficulties.

Around a third of the locations in the PIRI showed growth, Jakarta leading the way with average growth of 39 percent in 2012. But around half posted negative figures, with key second home destinations like Barcelona, Val d’Isere and the Bahamas languishing towards the bottom of the rankings, posting average price decreases of 8 per cent, 8.9 per cent and 10 per cent respectively.

In fact, much of the lower third of the rankings are dominated by European destinations, an unsurprising finding given the continued economic turmoil in the Eurozone and Hollande’s punitive wealth tax proposals.

Read more from Wealth Wednesday