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40% of Singapore households will be millionaires by 2017, forecasts wealth manager
Jinny Koh
Today
Wednesday, 7 May 2008
Back when Mr Chia Chor Yam was living in a five-room HDB flat 9 years ago, little did he expect that he would have a combined household income and assets worth more than $1 million today.
Mr Chia, 55, who is currently living in a 3-room condominium with his wife and three sons, said that taking into account the inflation rate back then, his combined household income and assets were about $400,000 nine years ago.
Like Mr Chia, many other individuals here may well see their own million-dollar dream come true nine years from now if projections made by a Barclays Wealth report prove to be accurate.
The report — done in cooperation with the Economist Intelligence Unit — projects that come 2017, two in every five households in Singapore or 40% will be millionaires — almost double the current number.
The report, which includes financial and non-financial wealth minus liabilities, noted that last year, there were 245,000 high net worth households in Singapore with overall wealth in excess of US$1 million ($1.3 million). It projected that the figure would rise to 463,000 resident and foreign households by 2017.
The report based its projection on several factors, such as the changing nature of the world's economies. In Singapore's case, for example, previously protected sectors, such as financial services, had been liberalised, while various bilateral free-trade agreements (FTA) had been concluded to promote foreign direct investment. All these will help more individuals to accumulate wealth.
"FTA is one of the measures of the openness of the economy," explained Mr Didier von Daeniken, chief executive for Barclays Wealth Asia Pacific.
"Customer profiles are also changing — such as seeing more entrepreneurs — and I think this trend will continue for the next 10 years," Mr von Daeniken said.
Associate Professor for Sociology from the National University of Singapore Tan Ern Ser said that the projection in the growth of millionaires here is possible with the passing of the older generations with low education.
"We are likely to have a high proportion of Singaporeans with higher skills and qualifications and hailing from dual-income households. So these people are presumably able to survive very well and thrive in the global competition," he said.
And if this projection is accurate, would Singapore, as a whole, benefit from having many more millionaires in its midst?
Assoc Prof Tan believes this would be so since Singapore will have a larger tax base and the government will be able to accumulate more surpluses to help the poorer segments of society.
"However, if a person owns a property worth a million bucks but is cash-poor, we would still be having lots of people not being able to live like millionaires, which is not helpful to the retail market," he added.
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