Courting the ‘rich and restless’: globalisation of real estate and the new spatial fixities of the super-rich in Singapore

Abstract

How have the globalisation of real estate and the rise of a transnational class of super-rich homebuyers challenged conventional analyses of local residential property markets? What analytical tools and concepts can we deploy to understand the dialectical tensions between the local and global; fixity and motion as well as the deterritorialisation and reterritorialisation of real estate by the super-rich? Drawing on Singapore as a case study, this paper interrogates the new ‘spatial fixities’ of the super-rich housing market at two inter-related scales of analysis. At the national scale, this spatial fixity could be interpreted in terms of the attempts by the Singapore ‘property state’ to attract high net-worth individuals to reside and invest in the country as a ‘quick fix’ way to boost national capital. At the global scale, this new spatial fixity of highly mobile super-rich can be seen in their territorialisation strategies to constantly seek out new safe havens to physically ‘park’ and grow their wealth beyond the traditional confines of national boundaries. Insofar as these two kinds of spatial fixes both complement and feed off one another via conspicuous real estate development, they also risk colliding and generating social contradictions that may potentially threaten their symbiotic relations.

Keywords:

• spatial fix
• Singapore
• super-rich
• luxury property
• (de)territorialisation

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. ‘Prime property' often refers to the most desirable and expensive properties listed in a city such as the ‘alpha territories’ of super-rich neighbourhoods in Belgravia, Knightsbridge and Kensington in west London.

2. In practically every aspect of national/urban development from the provision of public housing to the planning of business and industrial infrastructures, the Singapore property state wields an enormous power by its sheer ability to command and control scarce land resources (Klublall and Yuen, 1991; Chua, 1997; Dale, 1999; Kong and Yeoh, 2003; Seek, Sing, & Yu, 2016). By invoking the Land Acquisition Act (1966), the state was able to acquire loose land parcels that were subsequently assembled and sold to the private developers through the highly profitable Sale of Sites programme (between 2013 and 2014, land sales alone generated revenues of more than S$35 billion for the state (Ministry of Finance, 2014)). Through this system, the state was able to own, directly or indirectly through government agencies and statutory boards, up to 87% of the land in Singapore. Currently, the state owns up to 58% of the land in Singapore, with another 29% held by statutory boards, while only 13% is under private ownership.

3. US$1 is approximately equivalent to S$1.35.

4. It is debatable just how footloose and physically mobile the super-rich truly are. As Ley (2010) reminds us, transnational elites no matter how financially well-endowed and global savvy are no ‘masters of the universe’ as their everyday family lives remain quite localised. While their business investment strategies may be highly mobile, their everyday lives are relatively more grounded and spatially fixed in particular cities or places over a period of time.

5. It needs to be qualified that super-rich homebuyers in Singapore include both foreigners as well as wealthy local Singaporeans. In the ultra-rich Sentosa Cove development for example, local Singaporeans make up as much as 40% of the homeowners (though some of these Singaporean-owned units may be rented out to wealthy foreigners). Many of these local super-rich are also expanding their property portfolio to cities in Australia, New Zealand, the UK and China (Haila, 2015, p. 172). In 2013, Singaporean investors were the largest overseas buyers of new homes constructed by Berkeley, London's largest housing developer. Wealthy Singaporean housing investors also comprised 3.8% of all buyers in London's prime districts before dropping to 1.7% recently as the result of the capping of bank borrowing limits imposed by the Singapore government as a domestic property cooling measure (The Straits Times, 2015).

6. The Demographia report (2015) uses the ‘median multiple’ measurement (i.e. the median house price divided by gross annual median household income) to rate housing affordability across 378 cities in nine countries. Accordingly, a grade of 3.0 and below is considered to be affordable, 3.1–4.0 moderately unaffordable, 4.1–5.0 seriously unaffordable and 5.1 and above severely unaffordable.

7. It should also be noted that while the Singapore state intervenes in the pricing of new flats sold directly by the Housing Development Board, the resale of public housing flats in the property market is left largely to market forces. Since the 2009, the transacted prices of resale HDB flats have risen beyond the median average household income, prompting the government to impose several indirect market ‘cooling’ measures such as the introduction of higher stamp duties and changes to the resale process of HDB flats (Cheam, 2011).