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.