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Rich Chinese and Taiwanese flooding into Singapore buying up houses

The South China Morning Post (SCMP) reported on Friday (16 Jun) that Singapore has become a magnet for investment from Taiwan.

Direct investment flows from Taiwan to Singapore reached S$7.21 billion in 2021 and S$6.1 billion last year, up from S$3.69 billion in 2020 and S$1.48 billion in 2019.

Taiwanese investment in Singapore has surged over the past two years as tension between China and Taiwan mounts, according to analysts.

“In Taiwan, what they have on their minds is a lot of uncertainty, given the tense relations with China,” said Kent Chong from PwC. “There is anxiety on the part of their funds.”

The Taiwanese rich favour Singapore because they believe it is politically “neutral” with options for residency, if needed, Chong added.

Wang Wei-chieh, a Taiwan-based foreign affairs analyst, said that Taiwanese businessmen have traditionally favoured investing in China since the 80s. But rising geopolitical tensions between the US and China and across the Taiwan Strait are causing Taiwanese businessmen to change their mind.

Cross-strait tensions have risen in recent years and peaked last year, when former US House speaker Nancy Pelosi visited Taiwan. This prompted massive military drills by mainland China near the waters of Taiwan. China also has imposed trade sanctions on Taiwan exports.

Ms Victoria Garrett, head of residential at Knight Frank Asia-Pacific, said, “We have seen strong interest over recent years of wealthy Taiwanese looking for homes in Singapore.

“A notable transaction was the bulk purchase at the Swire development, Eden, by the Tsai family of Taiwan who are behind snack food giant Want Want China Holdings. They bought all 20 units at the completed freehold luxury development at 2 Draycott Park for $293 million,” Ms Garrett revealed.

“These days, they look for proximity to family in Taiwan as opposed to the US or Australia. Singapore’s success in managing the Covid-19 pandemic has also attracted wealth from Taiwan, along with the quality of healthcare on offer here.”

Mainland Chinese also coming to Singapore

Mainland Chinese are also increasing their exposure to Singapore over the past two years. Inward direct investment from mainland Chinese individuals and institutions reached S$8.7 billion in 2021 and S$9.28 billion last year, up from just S$2.19 billion in 2020.

Investors in Hong Kong – who analysts believe to be largely mainland Chinese bank account holders – parked slightly more than S$10 billion in Singapore last year, up from S$3.45 billion in 2021 and S$1.68 billion in 2020.

“Covid-zero policies and the resulting lockdowns made many successful, rich business people and their families realise the system in China has embedded a lot of institutional uncertainty about their wealth, their business, and their families,” said Chen Zhiwu, chair professor of finance at the University of Hong Kong.

Chinese capital continues to flow out despite Beijing instituting tighter monetary control than before. Mainland Chinese buyers made up nearly one-quarter of the buyers of the 425 luxury homes sold in Singapore last year, outnumbering US citizens by more than two to one.

In an interview with Reuters early this year, mainland Chinese graduate student Zayn Zhang, 26, is hoping that studying at a university in Singapore will lead to permanent residency. Meanwhile, his wife is out looking for a S$5-7 million penthouse.

“Singapore is great. It is stable and offers a lot of investment opportunities,” Zhang said. His family might establish a Singapore family office to manage its wealth in the future, he added.

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