KUALA LUMPUR, July 20 — During Singapore’s economic boom, whisky dealer Manjit Gill sold daily to wealthy mainland Chinese clients, who would sometimes spend up to S$100,000 (RM348,114) on single malt.
He told Bloomberg, now, a good week includes just three sales, and extravagant purchases are rare.
According to the Bloomberg report, the shift reflects a broader trend among Asia’s ultra-rich, in particular Chinese tycoons in Singapore, as the country grapples with a slowdown in spending after the pandemic’s luxury boom.
Demand has slowed and prices for high-end condominiums have declined, while sales of Bentleys and Ferraris have plunged.
Various factors have led to this, from high interest rates to tax hikes but as noted by observers to Bloomberg, this is because the wealthy are opting for more discreet spending to avoid drawing attention, following the crackdown on money laundering and growing discontent among locals over rising living costs.
In 2023, Singapore uncovered a major money laundering case involving over S$3 billion, with illicit funds funnelled through the city-state’s financial system. This led to heightened regulatory scrutiny which saw the wealthy shifting towards more low-key spending.
As reported in Bloomberg, the 10 China-born individuals behind the high-profile money laundering case, acquired over 200 properties, including high-end homes on Sentosa Resort Island.
One of the money launderers was said to have paid S$150,000 a month for a villa with a rooftop pool and gym, but now with these individuals caught and a 60 per cent tax on residential properties bought by foreigners, the rental market has experienced a substantial decline with larger homes available at lower prices. A villa in River Valley offered for just S$60,000 per month.
Singaporean banks have also tightened their know-your-customer procedures, closely scrutinising wealthy Chinese clients.
The super-luxury car market, where vehicles typically cost at least S$1 million, has significantly slowed. In the first quarter of 2024, only 32 new cars from six top brands were sold in Singapore, marking a 74 per cent drop compared to the previous year, said Bloomberg.