Thursday, October 4, 2012

Asia's ultra-wealthy invest in real estate


SINGAPORE: Out of the total amount of real estate investments put in by Asian investors last year, nearly a third or US$70 billion were from the ultra-wealthy.

According to a report from Singapore-based consultancy firm Wealth-X, 250 billion out of US$1.9 trillion of the ultra-wealthy Asians' net worth were from real estate.

"There are so many ultra-high net worth individuals globally, 187,000 in total, 43,000 in Asia alone," said Mykolas Rambus, the CEO of Wealth-X.

"We are talking about over US$25 trillion of wealth they have in excess. For example the average ultra-high net worth (individual) has in China, US$41 million in liquid assets in cash and cash equivalent, ready to invest."

According to the report, most of these Asian ultra-wealthy individuals are from China, Hong Kong, Indonesia, Malaysia and Singapore.

Other market watchers say most of them are not real estate speculators.

"These ultra-high net worth individuals don't make decisions on a whim," said Colin Tan, research head of Chesterton Suntec.

"They may have considered their decisions to invest in a property or the real estate market over a period of time. They are likely to follow a long-term approach and accumulate properties."

Singapore remains a safe haven for ultra-high net worth investors, particularly those from China looking to diversify their investments beyond China.

Despite recent cooling measures in Singapore, the number of real estate transactions in the second quarter increased by 37 per cent from the previous quarter.

Market watchers say foreign investors are most adverse to capital gains tax, where a certain amount of profit must be paid to the authorities.



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