Rising interest rates may not stop home prices from rising

by Albert02

Rising interest rates may not stop home prices from rising

Rising interest rates may not stop home prices from rising. Property cooling measures put in place in mid-December 2021 appear to be temporary. The flash estimate of private home prices for Q2 2022 by the Urban Redevelopment Authority showed a 3.2 percent quarterly increase, compared to a 0.7 percent increase in Q1 2022. Year on year, private home prices increased 10.3 percent.

Property consultants CBRE and Huttons have raised their 2022 private home price growth forecasts from 3% to 5% and 8%, respectively. However, with rising home loan rates, homeowners and new home buyers may be in for a bumpy ride. To combat rising inflation, the Federal Reserve of the United States raised its benchmark interest rate by three-quarters of a percentage point in mid-June. The Federal Reserve is expected to raise interest rates again.

DBS raised its rates on 2- and 3-year fixed-rate home loan packages to 2.75 percent per annum in late June. Approximately three months prior, the bank charged 1.65% for a two-year fixed rate loan and 1.85% for a three-year fixed rate loan. Meanwhile, in June, UOB increased the rate on its 3-year fixed rate home loan package to 3.08 percent per annum. While rising home loan rates are a significant headwind for the private housing market, some homeowners and prospective buyers may be unaffected.

There are wealthy people who do not take out home loans. Those who benefit from successful en-bloc sales, those downsizing from larger homes, and those who buy homes for their children, including those who use trusts to do so, are all included. Additionally, some existing homeowners may have locked in fixed rates of less than 2% per year for a period of time or made capital repayments on their loans.

Click the image to read the full details of report.
Source:
https://www.businesstimes.com.sg/opinion/rising-interest-rates-may-not-stop-home-prices-from-rising

Discover Your Home Here
Come and Experience it Yourselves



One Pearl Bank

Book ShowFlat Appointment


Proudly Developed by : CapitaLand

You may also like

error: Content is protected !!