Housing Trends of Asian UHNWI's
Where are the people with the highest net-worths buying?
Anyone who has looked into the Singapore rental market recently will know that there has been a huge bounce-back from the COVID lull and it seems its not just in the rental market either, as Knight Frank have discovered in their recent Asia-Pacific Outlook Report.
“Compared to last year, there has been growth in the number of international deals that have been transacted with a higher capital value from Asian investors with interest in residential properties located in the United Kingdom (London), United States (New York), Japan, Singapore, and Australia, indicating strong interest in outbound investments. We believe the region’s property market is better anchored to its economic fundamentals, which will also continually revive from reopening dynamics. The region’s economic growth story will remain urban-centric, and its residential investment landscape will continue to be defined by its prime urban cores. Underpinned by its high rates of urbanisation, investors can look forward to a more sustainable growth trajectory and wealth preservation profile," shares Victoria Garrett, head of residential, Asia-Pacific.
We break down some key highlights of The Asia-Pacific Outlook Report 2023
- Asian buyers are on the lookout for international trophy homes: Rising mortgage rates and the high inflationary environment impact housing affordability, particularly the mid to lower end of the housing spectrum. The prime segment where buyers are less sensitive to rate hikes and rising borrowing costs is still thriving, attributing to wealth preservation by high-net-worth individuals (HNWIs). Safe haven’s requirements coupled with volatility in other asset classes will support HNWIs’ demand for prime properties in gateway markets such as the United Kingdom, United States, Singapore, Monaco, Switzerland, etc.
- Safe Haven markets that are popular among Asian HNWIs are: United Kingdom, United States, and Singapore rank among the top 20 global destinations that Asian investors are interested in when it comes to purchasing a second home with overwhelming interest, particularly from Chinese investors from the Chinese mainland who own the most residential properties worldwide, owning 3.8 global properties on average. According to Knight Frank’s prime global residential forecast for 2023, Singapore is the only Asian city in the top ten and one of only four cities whose forecast has climbed in the past six months (out of 25 global cities tracked). Singapore HNWIs are the most optimistic about the direction of the house prices in their city in the next 12 months with 86% expecting an increase. Further fuelled by the recent weakness of the pound and strengthening of the US dollar with prime prices increasing by 7.1% in New York, the highest rate in 8 years, resumption of travel and Singapore offering economic prospects and a steady inflow of inbound talent, these cities remain the markets to watch for Asian investors whose currencies are dollar-pegged.
- Strong prime rental market: One of the key trends to monitor in 2023 is the tendency for prime homeowners from both Asia and around the globe to lean more towards the option of becoming temporary landlords as a potential inflation hedge, according to Knight Frank’s prime global residential forecast for 2023.
- New Zealand and Australia are ahead of the curve with regard to price reversal: Key markets leading the price reversal include New Zealand and Australian cities, given the strong price run-up during the pandemic. New Zealand has seen the biggest decline with prices down 3% on a 3-month basis. New responsible lending laws and seven rate rises since October 2021 have shifted buyer sentiment, from a fear of missing out to a fear of overpaying. Rate of prices slowing down and normalising offers a more sustainable backdrop for growth in most markets moving forward as large parts of the world move to a post-pandemic landscape coupled with inflation, rising taxes, and more property regulations.
Global Investment Opportunities Popular Among Asian Investors
- Auckland, New Zealand Project in Spotlight - Elevation: Elevation is a landmark development in Northcote, and only minutes from Auckland’s Central Business District, developed by TLC Modular as an exemplary apartment project showcasing Modular construction within New Zealand and designed to allow owners and occupiers to have access to an elevated style of living with Onewa (one of the apartment buildings of Elevation) comprising of 104 apartments, ranging from one to three bedrooms.
- Sydney, Australia Project in Spotlight - Maeve: Maeve is a new luxury residential development, a collection of 24 contemporary apartments and townhouses in Sydney’s wine region of Bowral in the Southern Highlands. Bowral-based Tziallas Architects designed the homes, with Chloe Matters Design as the interior designer, with the residences designed to provide the best of country life in Bowral, just 1.5 hours from Sydney’s Central Business District, with a cosmopolitan twist, perfect for investors seeking for a country holiday home.
- Batam, Indonesia Project in Spotlight – Villa Harimau: Perched on top of a panoramic plateau at Bukit Harimau in Batam, Riau Islands, the luxurious 6-bedroom Villa Harimau priced at USD 3.6 million was designed by world-renowned Balinese architect Popo Danes and built in 2017. Villa Harimau was completely retrofitted in 2022 with custom-built Balinese furnishings, modern interior design and accessories as well as the installation of an entirely new kitchen, new appliances and a separate breakfast area. The luxurious 6-bedroom Villa Harimau with spectacular sea views includes a combination of indoor and outdoor rain showers and teak baths, a charming children’s room with 4 built-in bunk beds and an adjoining standalone two-storey guest house and three-bedroom staff house.
- London, United Kingdom Project in Spotlight – Chelsea Barracks: Situated in Belgravia, an affluent historic district in Central London, Chelsea Barracks is a world-class development comprising a rare collection of apartments, penthouses and townhouses, set around seven garden squares and built over 12.8 acres. A highly coveted central London address, this prestigious district is bordered by Sloane Street and the infamous King's Road; abundant with luxury stores, iconic boutiques, contemporary furnishing stores, and fine art galleries. An exceptional selection of the highest-ranking schools and universities in the United Kingdom are also within close proximity of Chelsea Barracks.
- New York Project, United States in Spotlight – Towers of The Waldorf Astoria: From its inception, The Waldorf Astoria was a true palace in New York City and a haven for cultural figures. Marilyn Monroe, Frank Sinatra and Elizabeth Taylor were regulars while in 1957 Queen Elizabeth II had a Royal Suite created for her stay and a gala dinner thrown in her honour. Timeless and opulent, Waldorf Astoria has a special place in the affections of New Yorkers, Americans, and international visitors alike. Now, ninety years after it first opened, the Waldorf Astoria is preparing for the next stage in its illustrious life with an extensive facelift to offer 375 branded residences for sale alongside 375 gracious hotel rooms and suites. For the very first-time buyers have the opportunity to own a piece of history.
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