Singaporeans will be richest in the world by 2017

[Richest]

Well if we do surpass HK in number of millionaires in 2017 and with HK property prices now 30-50% higher than Singapore's,I wonder how much Singapore property prices will climb by 2017.

S'pore ousting HK as top millionaire hub

China seen to be 3rd richest country by 2017: study

By NISHA RAMCHANDANI


(SINGAPORE) Singapore is expected to pull ahead of Hong Kong as home to the highest concentration of millionaires over the next decade, sealing its reputation as a wealth centre not just in Asia but worldwide.

And while the US and Japan should remain the top two largest global economies, emerging markets such as China, India, Russia and Brazil will make their presence felt more strongly.

Now ranked seventh in terms of total net worth, China will grab third place by 2017, bypassing several G7 countries to become the third-richest country, while India is expected to make its debut in the top 10 list at No 8. Russia and Brazil will also display significant growth, moving up from 19th to 11th place and 15th to 12th place respectively.

With the Economist Intelligence Unit, Barclays Wealth released a report yesterday that forecasts the evolution of the level and distribution of household wealth in 50 countries between 2007 and 2017. Household wealth was measured using three components - financial holdings such as cash and other liquid assets, non-financial holdings such as property, and an aggregate measure that combined the two.

Last year, Singapore trailed Hong Kong in highest wealth density, with 23.3 per cent of residents having wealth of more than US$1 million. But by 2017, Singapore is expected to see this figure grow to 40.7 per cent - some 436,000 households - in comparison to Hong Kong's predicted 39.4 per cent.

According to the report, countries with the highest percentage of dollar millionaires tend to be small, densely populated financial centres such as Singapore and Switzerland.

In addition, the study revealed that the disproportionate distribution of wealth is expected to narrow as the concentration of wealthy households in Singapore, with US$3 million and US$5 million, is on an upward trend. Households with wealth of US$3 million will more than double from the current 5.1 per cent to 12.5 per cent, while those with US$5 million will almost triple from 2.1 per cent to 6 per cent.

Barclays Wealth chief executive for Asia-Pacific, Didier von Daeniken, pointed to Singapore's recent efforts to shift its focus from manufacturing towards technology and financial services. In addition, the opening up of previously protected sectors, like financial services, and bilateral trade agreements serve as an impetus to garner foreign direct investment.

For China, wealth creation has stemmed largely from the stock market and real estate. Citing figures from Ernst & Young, the report said 464 IPOs were launched in China over the past three years, raising US$134 billion. As the country's economy continues to expand, the average net worth per household is expected to quadruple, from US$18,000 in 2007 to US$74,000 10 years later.

'Asia now represents 25 per cent of HNWI individual wealth globally but only about 10 per cent of the income of the major private banks,' said Mr Daeniken. 'Growth for private banks can come from two areas - more penetration of existing wealth and more wealth being created.'

In Asia, Barclays clients are typically entrepreneurs, a trend that is expected to remain in the future.

[Great news]

Was thinking of buying.  Methinks its a good time to get in still.  I can afford to hold until 2017.  If I buy a unit now at 1.5M, if she hits 4M in 10 yrs, that would be nice.

Looks like we are set for another bull run again this year.  Prices still increasing.

[Kubes.SG]

Saw this article when it came out and the figure that 23% of households here have a net-worth in excess of US$1m troubled me as being too high.  All the income data I see says that average household income in Singapore is around SG$4,000 per month. 

The only way I can see they have come up with this figure is through the proportion of Private Housing in Singapore and assumption that the base price is close to US$1m.

If that is the basis of their assessment, I think they should look at what ever optimistic property bulls forecast for singapore.  Worth reposting an earlier point I made that SG will be the richest place on earth.

-----------------------------

"Instead, what I would like you to do is post each of the 33 year y-on-y growth rates from 1975 to 2007 along with the property values (PPPI I guess) so that we can see how SG property has performed over the long run.  This will help us all understand the current state of the property market versus the long-term market cycles, and where we are on the current property market cycle."

Forget all that mumbo jumbo you are asking for. Let's keep it simple. A semidetached costing 30k-50k (I know because my father bought it for 30k) in early 1970s is not worth around 2 million. A bungalow worth 200k in 1978/79 is now worth around 5 million. You go and do the calculations on what is the yearly return.. Much more than 7%. Who cares about the ups and downs as long as in the long term prices go up and as shown in the local context it has gone up a lot and more of this is to come over the next 25-30 years. 

We LLs are in for the long term and speculators are not going to bother to come into this forum and waste their time because it is not going to make any difference doing so to their investments if they are caught. The long term investors like us think about 20 years down the road and we are going to end up making a handsome profit.

Opps, sorry about mumbo jumbo. Lets keep it simple just like you and long term owner want.  Lets use your simple examples.  I fired up Excel and this is what I came up with.

Your dad's semidetached:  outstanding investment.  Estimated compound growth rate of 13.15% based on the data you provided.  Since past performance is a perfect indicator of future performance in Unique Singapore your dad's apartment will be worth  $7,790,698.15 in another 10 years, and in 20 years it will be worth  $26,799,208.08, and in 30 years it will be worth  $92,186,546.06

Singapore Bungalows:  also outstanding investments.  Estimated compound growth rate of 11.75% based on the data you provided.  Since past performance is a perfect indicator of future performance in Unique Singaporean Bungalow will be worth  $19,018,611.18 in another 10 years, and in 20 years it will be worth  $ 57,763,582.14, and in 30 years it will be worth  $ 175,440,330.06.

This is very simple and clear.   It is obvious that I have been completely wrong about Singapore property.  I got myself all confused about silly complicated stuff like:   business and market cycles, timing, bubbles, recessions, property supply and demand, speculation, money supply, affordability, interest rates, currency rates, inflation rates, population growth, GDP growth, etc. when all I had to do was look at the last 30 years to know what the next 30 years will look like.

It stands to reason that the last 2 years performance will indicate what the next 2 years performance will be like - is that how it works?

So if I want to retire in 20 years time with $26.7m all I need to do is find a $2m property in Singapore to buy ASAP.  Correct?

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Interesting factoid:
We established that your dad's semidetached is a better long investment than a Good Class Bungalow.  I figured out that your dad's semidetached will be worth more than the GCB in the year 2090, when it is worth $56,846,610,488  and the typical GCB is worth $56,624,070,956

Another factoid:
Using this data as base for all Singapore, plus LTO POPn POPf population growths rates and the goal of 6m pop by 2045, SG property sector alone will be worth: $804,338,816,197,627 by 2045.  That's SG$804 trillion.   To put this into perspective, today US economy is est to have a net worth of $59 trillion.  For simplicity lets assume the SGD is at parity with USD.  Very likely that little Singapore will have greater wealth and assets than the entire US sooner than we think.
 

[worrying]

What I find most worrying about this article is that they make it sound like this is a good thing.  How are the  majority Singaporeans living in  the  HDB  heartlands going to feel with such a wide income disparity.  It's ok when it's a small % of the population with a very high  net  worth, but when it's such a large proportion of the population  living like kings, surely it could lead to some unrest.  I don't know - just a thought.

[clueliss]

I showed this interesting article to all of the folks at the hawker centre last lunch time. They were all very pleased because they had all wanted to be millionaires for some time now and after reading it in the ST they know it will now happen. In fact most of them are not bothering to buy 4D anymore after reading this article

[I call BS]

23% of Singaporeans, over 1 out of 5, have wealth of US$1mil?  That's crazy, I absolutely reject that.  They need to define wealth and cite the source of the data.  That would mean that probably one of two (50%) would have wealth of US$500,000.  Impossible.

[Kaypo]

Is possible if you add up the value of their HDB flat, CPF balance, car, insurance etc.

[Happyness]

As most millionaires are benchmarked in USD maybe the reporter is forcasting a severe drop in USD exchange rates versus the SGD. If 1 USD = 0.5 SGD we would easily exceed those numbers right?