The value of luxury residential property in Singapore dropped significantly in 2014, according to Knight Frank’s Prime International Residential Index (PIRI) which was published in the consultancy’s 2015 Wealth Report.
The index tracks the change in price of 100 of the world’s key luxury city and second-home markets, with Singapore falling 12.4 percent to 98th place – almost the bottom of the PIRI rankings.
Knight Frank’s Research Head for Singapore Alice Tan highlighted that Singapore was the only Asian country in the bottom 40 places of the PIRI table. The next lowest Asian cities are Beijing at 63rd place and Taipei (65th).
Nicholas Hoult, Head of Research for Asia Pacific, noted that macro-prudential tools introduced to cool residential markets, continue to have an impact, particularly in places like Singapore and Hong Kong.
“Government policy has been deliberately aimed at limiting price rises through higher taxation and mortgage market intervention,” he said in reference to both cities.
In Singapore, the property cooling measures have hit the high-end residential sector the most, with prices falling by over 10 percent, revealed the report.
Tan shared that the price gap between the high-end and mid-tier residential segments have begun to narrow, especially for the last quarter in 2014.
“This may be a good time for the UHNWIs (ultra-high-net-worth individuals) to re-look at luxury residential homes here, because we believe if the government relaxes the cooling measure for this segment of the market, the recovery could be evident.
“In fact, there was a call by the Real Estate Developers Association of Singapore (REDAS) to the government to relax the cooling measures for the high-end residential sector, given that these are the homes that tend to attract UHNWIs who in turn will attract investments into the country and create jobs for Singaporeans,” she added.
UHNWIs are defined as someone with a net worth of US$30 million or more, excluding their principle residence.
To download the full report, go to: http://bit.ly/1G0D5HT
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
