Living the high life may be cheaper in Singapore than Hong Kong judging by luxury property prices in the Asian financial hubs.
Average prime luxury home prices are 26 percent cheaper in Singapore than Hong Kong in U.S. dollar terms, according to Nomura, far wider than the 14 percent discount seen in 2000.
In Singapore, luxury residential properties averaged $1,807 per square foot in the second quarter, compared with $2,442 per square foot in Hong Kong, Nomura's calculations show.
A prime luxury home is defined as a property with a living space of over 1,800 square feet in Singapore and 1,400 square feet in Hong Kong that is situated in a prime residential district.
One reason for the discount is that Singapore is less attractive for foreign investors than Hong Kong, says Min Chow Sai, analyst at Nomura. The latter offers buyers lower transaction costs and a shorter holding period, for example.
In Hong Kong, sellers are subject to a stamp duty of 15 percent of the property price if the home is sold within one year of purchase. In Singapore, the rate is 16 percent for the same holding period. This rate drops to 10 percent in Hong Kong if the property is sold within two years, compared with 12 percent in Singapore.
Some of these factors, however, may be less relevant for buyers who want a home for the long haul.