Singapore topped Hong Kong as the most desired place in Asia for so-called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management survey showed.
Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their counties of origin prefer Singapore, while 24 per cent pick Hong Kong, the second most popular in the region, RBC and The Economist Intelligence Unit said in a joint research report yesterday.
Real estate led the list of preferred assets for the internationally mobile wealthy, according to the survey, which showed 23 per cent of those in Singapore reporting a “high propensity” for property investment, compared with 7 per cent in North America. The island’s home prices climbed to a record in the third quarter, prompting the government to restrict home loans and cap property development.
“Singapore always has this quality as a safe haven, not just for your money, but also for your family,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore.
For mobile millionaires who moved to Singapore, 89 per cent ranked quality of life as important and 83 percent cited the country’s political stability as important, the survey showed. Infrastructure and educational opportunity were also given as reasons to live there.
Singapore posted a 14 per cent increase in millionaire households to 188,000 last year, when the Asia-Pacific region countered a decline in wealth in Western Europe and the US, according to a Boston Consulting Group report published May 31.
The proportion of millionaire homes in the city was 17 per cent, the highest in the world, followed by Qatar and Kuwait, according to Boston Consulting Group. Singapore has a population of 5.3 million, of which about 2 million are foreigners.
“High net worth individuals with global outlooks for their businesses and families are choosing Singapore to live and invest in,” Barend Janssens, the Singapore-based head of RBC’s wealth-management unit for emerging markets, said in a statement.
The city-state is grappling with the elevated inflation that comes with years of economic growth and population expansion on an island smaller than New York City, with rising demand fuelling record property and car prices.
In the three months ended September 30, the island’s private residential property price index rose 0.6 per cent to a record 208.2 points, according to government data. In prime districts, apartment prices gained 0.2 per cent, compared with a 1 per cent increase in the suburbs.
The Monetary Authority of Singapore told lenders on October 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in an attempt to avert a housing bubble. The government said in September it plans to cap the number of homes that can be developed in suburban projects as it seeks to curb the increasing trend of so-called shoebox apartments.
The cost of a permit to own a small car for 10 years rose to an unprecedented S$78,523 (HK$498,008) on December 5 from S$46,889 at the start of the year. That excludes the cost of buying a car. The government auctions limited vehicle permits to control congestion and pollution.
“Only if you’re very young and highly qualified would you want to rough it out in Hong Kong for a few years,” Leong said. “But once you have kids, the pollution gets to you, the lack of greenery gets to you, the crowdedness gets to you.”
The country has tightened monetary policy this year, while neighbours from Thailand to the Philippines cut interest rates, spurring gains in the currency even as the government predicts gross domestic product will rise at the slowest pace in three years.
Price gains in Singapore have reached 4 per cent or more every month bar one since November 2010, more than double the 1.9 per cent average in the past two decades. Inflation is forecast by the central bank to average more than 4.5 per cent this year.
“A wider range of services has been developed, catering to high-end needs,” Leong said. “We’ve won the battle as the destination to live in because we’ve focused on the non- financial aspects of growth, meaning we’ve invested in greening Singapore, making it easy for families to live here.”
RBC Wealth Management, part of Toronto-based Royal Bank of Canada, and EIU, a London-based unit of The Economist Group, surveyed 558 individuals who have at least US$1 million (HK$7.7 million) of investable assets through June to October.