Singapore has emerged as the most desirable locations to buy investment homes for wealthy Asians within Asia and the fourth most desirable among Asian homebuyers globally.
This comes as Singapore continues to be an “oasis for investments due to the stable political environment as well as the extensive measures implemented” by the government to mitigate any recurrences of COVID-19 infections, said Knight Frank in its latest edition of The Wealth Report.
The report noted that unlike other Asia Pacific cities, Singapore saw prime home prices contract 0.2% in 2020 as travel restrictions prevented potential foreign investors from acquiring homes in Singapore.
“The prolonged and continuing travel measures restricting the inflow of visitors into the city-state prevented potential foreign investors interested in purchasing homes in Singapore from physically viewing these units, resulting in an overall 20.4% year-on-year decline in sales of luxury homes compared to 2019,” said Leonard Tay, Head of Research at Knight Frank Singapore.
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“Together with a lack of new launches, the top-tier class of homes in Singapore struggled to gain traction in the year of the pandemic.”
Knight Frank’s Prime International Residential Index (PIRI 100) showed that four Asia Pacific cities occupied the top five spots, with Auckland taking the top spot, followed by Shenzen, Seoul and Manila.
Despite the pandemic, the 100 locations covered by PIRI 100 posted average price hikes of 1.9%, up from 2019’s 1.8%. The Asia-Pacific saw 14 out of 23 prime markets register price growth, underscoring the resilience of prices within the region.
“The low borrowing costs and the improved vaccine optimism seen towards the end of 2020 were the main drivers that aided some of the prime residential markets in Asia-Pacific through the pandemic storm,” said Victoria Garrett, Head of Residential, Asia-Pacific at Knight Frank.
For this year, Knight Frank expects demand for luxury homes in Singapore to increase “as investible properties remain at comparatively affordable price points, and this is expected to strengthen foreign buyers’ confidence in the market, which could translate into greater sales of prime non-landed residential units once the COVID-19 vaccine distribution proves to be successful and travel restrictions ease,” said Tay.