WHEN it comes to luxury homes in prime locations, Singapore had the eighth-most expensive properties in the world last year, ahead of cities such as Tokyo, Hong Kong and Paris.
Average prices of top-end properties in the Republic rose by 31 per cent to ?1,197 (S$3,232) per sq ft (psf), the sixth-biggest price jump globally, according to a survey by Knight Frank and Citi Private Bank.
Their 2008 Annual Wealth Report found that the prices of luxury homes around the world increased, on average, by 11 per cent last year.
The sub-prime credit crisis led to 'falling prices, restricted financing and declines in sale volumes', which spread from the United States to Europe, but the report also noted the emergence of a new breed of super rich.
'Commodity price rises have brought wealth and created a significant number of additional new high net worth individuals in countries that benefit from a high level of natural resources - Brazil, Canada, Australia and Russia, which each added more than 8,500 additional wealthy residents in 2007.'
Rising affluence has also generated another market for second homes and holiday homes, said the report.
'We have yet to see the full impact on demand for property from the rising mass affluent population of central and eastern Europe, let alone from China, India, South Korea and other Asian economies,' it said, adding that 'the boom in second home ownership over the past decade will be nothing compared with the growth we will see over the next decade'.
The highest price growth was achieved by prime residential properties in Cortina D' Ampezzo in Italy (61 per cent), St Jean Cap Ferrat in France (50 per cent) and Antigua (40 per cent) .
Mr Liam Bailey, Knight Frank's head of residential research and author of the report, said prices grew strongly in the emerging economies, especially China and central and eastern Europe.
A second area of strong growth was in the global financial centres and second-home hot spots in France, Italy and the Caribbean, he added.
'Overall in 2007, capital growth in prime residential properties has been strongest in the main global financial centres and those with benign tax jurisdictions,' he added.
Five of the top 10 locations fell into this category, with London outperforming all other centres. It had 29 per cent growth and prices averaged ?3,025 psf. Prices of properties valued over ?10 million there grew by 37 per cent.
Monaco, in Europe, was second priciest at ?2,877 psf and St Jean Cap Ferrat was third at ?2,860 psf.
