Singapore wealth population on the rise

A boom in family offices, and recognition as a growing wealth hub, sees 9.6% rise in ultra-high-net-worth-individuals in Singapore.

Written By:

Nicholas Keong, Knight Frank

10 Jul 2023

5 minutes to read

The latest update from The Wealth Report, 'Wealth Populations' first launched in March this year, reveals how the global population of ultra-high-net-worth-individuals (UHNWIs) declined by 3.8% in 2022, after a record climb of 9.3% in 2021. Wealth populations in most Asian cities shrank due to factors such as slowing property price growth.

However, Singapore’s wealth trajectory continues its upward climb as the city-state continues attracting wealth via flight to stability and flight to safety moves. Its UHNWI population recorded a 6.9% increase to 4,498 in 2022, from 4,206 in 2021. By 2027, this figure is expected to grow to 17.7%, to hit some 5,300 individuals.

The Lion City is among Asia’s top 10 fastest-growing wealth hubs along with Malaysia and Indonesia; where wealthy populations have expanded by 7-9%, with Singapore’s UHNWI growth projected to increase 17.7% from 2022 to 2027.

Singapore now joins London, Dubai and Frankfurt in the top 10 list of cities critical as world hubs post-Covid – based on the number and quality of flight connections. A trend first highlighted in The Wealth Report 2022, Singapore’s arrival in the rankings underlines the city-state’s steadily increasing global significance.

Global mobility has long been a must-have for wealthy investors, fuelling demand for second passports, visas and citizenships as competition to attract footloose wealthy is hotting up. While the UK, the EU and the US still attract considerable numbers of globally footloose, wealthy residents, Singapore’s position as a wealth powerhouse gaining more recognition.

A magnet for family offices

Singapore has always been a strong exporter of capital, but in the past five years, there has been fierce competition with Hong Kong to become the dominant financial hub in Asia.

Positioned as a regional leader in education and secure living, and a broad, pro-business economy, Singapore has in recent years made particularly large investments to strengthen its foothold as a global wealth hub, most notably via tax perks that incentivise the setting up of family offices.

The Monetary Authority of Singapore and the Singapore Economic Board have made efforts to establish the Family Office Development Team – to enhance the operating environment for family offices, deepen capabilities of family office professionals and service providers, and build a stronger community of family offices in Singapore.

The city-state’s sevenfold growth in family offices alone is testament to the size of the prize for exchequers. An investment of around S$10 million to S$20 million is required to set up a family office, but families have been known to pool resources.

Numbers of single-family offices have jumped nearly threefold since the pandemic began, largely driven by an influx of wealthy Chinese families. The rising number of wealthy individuals is fuelling upward pressure on prime property prices which we expect to continue through 2023.

According to a recent Bloomberg article, Singapore is climbing the ranks among the world’s largest asset-management centres and emerging as a destination of choice for offshore wealth stewardship. About 75% of assets under management (AUM) in Singapore are from diverse overseas sources, with North America and Europe each contributing about 17-18% of the city-state’s AUM and 33% coming from Asia.

Property capital inflows

Capital inflows are also expected from global high-net-worth-individuals (HNWIs), who see residential property as the safest asset class in Singapore – a title usually afforded to gold. Some 62% of HNWIs intend to use property as an inflation hedge and continue to seek ready-to-move-in prime family-size homes in Singapore against tight inventory.

“Singapore is unique in its offerings as a global wealth management hub and financial hub anchored in political stability, low corruption rates and transparent public institutions. It will remain a perfect base for businesses and investors seeking to capture the upside of the huge growth potential in Asia in the coming decade.” – Nicholas Keong, Senior Director & Head, Singapore Private Office.

Key themes for 2023

Safe-haven capital flight

Volatility in other asset classes will push buyers towards mature and transparent luxury markets.

Strong prime rental market

Some prime homeowners will opt to become temporary landlords as a potential inflation hedge.

Currency play

Central bank strengthening of the Singapore dollar will foster outbound capital.

More visas for the wealthy, and high-skilled workers

Singapore is targeting high earners and top talent via new visas, and more cities will follow.

Cash buyers will hold greater sway

Sellers will prioritise unleveraged buyers to expedite sales.

Wealth goals in 2023

The Knight Frank high-net-worth-pulse survey encapsulates the views of 500 HNWIs across 10 countries and territories. How do Singapore’s aspirations compare with the rest of the world?

Singapore Global

1 Income generation (32%) 1 Capital appreciation (31%)

2 Capital preservation (30%) 2 Capital preservation (26%)

3 Capital appreciation (28%) 3 Income generation (23%)

4 Diversification (10%) 4 Diversification (14%)

5 Impact investing/philanthropy (6%)

Source: Knight Frank HNW Pulse Survey

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