Singapore's ultra-high-value properties rose 144 per cent in value. (Thinkstock photo)
The past five years have seen ultra-rich homeowners reap an increase of 144 per cent in the value of their Singapore properties — the highest price hike in the world.
This boosts the average cost of the island's ultra-high-value homes to about £1,000 per sq ft (psf) or S$1,988 psf, and ranks the country in eighth place out of ten cities studied between December 2005 to December 2010, according to international real estate adviser Savills.
Topping the list in terms of price growth are Singapore (at 144 per cent), Mumbai (138 per cent), Moscow (110 per cent) and Hong Kong (83 per cent) — widely considered new world economies. The leaps in price growth reflect the geography of new wealth generations and creation of new billionaires over the period of study.
Interestingly, fellow new world economy Shanghai saw a mere 32 per cent growth, suggesting a connection to China's closed market: the billionaire demand there is solely domestic, whereas the other cities are fuelled by international buyers (except for Tokyo).
"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," said Savills.
Meanwhile, old world super prime markets Tokyo, London, Paris, Sydney and New York recorded lower growth rates but continue to dominate in terms of overall price. Savills concluded that their relative price (and political) stability, make them attractive investments.
"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," noted Savills. Sydney's ultra-high-value homes had an average price of £590 psf or nearly S$1,200.
For super prime prices, Hong Kong easily topped the list at £6,700 psf or S$13,500, followed by Tokyo (£5,190 psf or S$10,500) and Paris (£3,270 psf or $6,600).
"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," noted 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," Barnes added.
In an overall view, the value of ultra-prime properties soared 65 per cent over the past five years.
During the first half of 2011, billionaire homes increased 10 per cent in value, compared to 6 per cent for the wider housing markets in the ten cities studied.
In August this year, 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 jumped an average of 92 per cent from December 2005 to December 2010.
