Singapore emerges as the leading wealth capital in Asia-Pacific
Written by: Poppy Skinner
Created: 12 October 2023
According to Knight Frank's inaugural “Rise of the Super Wealth Hub” series, Singapore emerges as the leading wealth capital in Asia-Pacific.
According to Knight Frank's inaugural "Rise of the Super Wealth Hub" series, Singapore has cemented its position as the nerve centre and leading wealth capital in Asia-Pacific. This report assesses burgeoning wealth hubs using six comprehensive indicators designed to measure the live, work, and play aspects. All indicators are scaled from 0 to 1, with 1 representing the highest achievement and 0 the lowest.
Singapore has attained an average score of 0.79, the highest in Asia-Pacific attributed to its robust legal framework (0.98), high enterprise excellence (0.97), luxurious lifestyle (0.91), thriving urban prosperity (0.75) and strong governance and talent (0.69). The region's growing middle class and innovative entrepreneurs are among the major contributors to the surge in wealth, with Singapore at the forefront of this trend. As a result, Singapore's real estate market has received a significant boost, and foreign direct investment has spiked by an impressive 47% compared to 2019 levels.
However, Singapore’s score on the opulence aspect stands at 0.47 due to its small size, which limits the development of land-extensive recreational facilities, and the need to maximise land use has led to the shops being housed in shopping malls instead of high-street shopping. Similarly, in the Middle East, Dubai emerged as a winner, thanks to its luxurious lifestyle standing at 0.95 as per this assessment.
Christine Li, head of research at Knight Frank Asia-Pacific, shares: "The fabric, make-up, and raison d’être of many cities worldwide have been recast in the wake of the pandemic, with global real estate markets experiencing price and demand volatility. This has been underpinned by the ebb and flow of evolving demand drivers, which themselves have been heavily influenced by COVID-legacy factors such as the seemingly permanent shift to the adoption of hybrid working by many businesses to the outflow and subsequent return of residents from global city centres in search of more space and access to green sanctuaries. The most successful cities have been those governed by decisive leadership and rapid action to contain the virus, which fostered confidence, bolstered their safe-haven status, and thrust them to the forefront of global businesses and the world’s elite, reshaping global capital flows. In Asia, Singapore has claimed this crown."
Leonard Tay, head of research at Knight Frank Singapore, adds: "Singapore emerged from the COVID-19 pandemic with its safe-haven status enhanced. Known for its stability even in the midst of global uncertainty, Singapore is unique as a global wealth management and financial hub that is characterised by political stability and a pro-business government. As such, it is a favoured base for businesses and investors seeking to be part of the huge growth potential in Asia."
The report in bullet form:
- Work: Singapore's small size and highly educated workforce have propelled it to the forefront of economic performance, ranking second in the world for Gross Domestic Product (GDP) per capita by country in 2022. With a highly educated English-based workforce, Singapore has become an attractive destination for technology companies, manufacturers, international finance institutions, and multinational corporations. Its reputation for innovation, governance, competitiveness, and ease of doing business has made it a standout player in Southeast Asia, where it is tapping into the growing middle-class populations of emerging economies.
- Live: Singapore's prosperity continues to soar as industrialisation and commercial growth fuel a consistent increase in standards of living. The country's currency remains strong, public infrastructure has improved, and social mobility is on the rise. Additionally, Singapore's commitment to public safety ensures a secure and safe environment for all.
- Play: However, in the play segment, Singapore’s small size limits the development of land-extensive recreational facilities such as golf courses, theme parks and sprawling national parks. Additionally, the importance of shipping and port facilities has also limited the number and length of beaches for recreational use on the island. The need to maximise land use has also led to the shops being housed in shopping malls instead of high-street shopping.
- Green: Singapore is taking significant steps towards sustainable development with its Green Plan 2030. Despite only contributing 0.1% of global emissions, the plan includes concrete targets such as developing new parks and reducing waste to landfill per capita per day by 20%. By 2030, the goal is for 80% of Singapore's buildings to be green, with 80% of new buildings to be Super Low Energy buildings. These efforts demonstrate Singapore's commitment to being a responsible global citizen and are certainly newsworthy.
- Residential Market Performance: Singapore has a model public housing programme that is often the envy of other cities, housing more than 70% of the population. However, the private residential market, representing 30% of all housing inventory, has seen a boost in demand in the outskirts and suburban areas due to the pandemic. Despite this, Singapore continues to be a safe haven for many high-net-worth individuals and families looking for luxury homes in prime locations also exhibited by Singapore’s phenomenal rental growth standing at 53% according to Knight Frank’s latest edition of Prime Global Rental Index.
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