This will be driven by the flight to safety of real estate amid inflation.
Home prices could rise 7% year-over-year in 2022 as the industry acts as a hedge against inflation and dwindling unsold inventory, Savills reported.
Despite the higher rates of the additional buyer’s stamp duty, Savills said the zero COVID policy implemented by China and the war between Ukraine and Russia have led to an increase in the price of raw materials which has made investing in residential real estate more attractive.
“With global inflation expected to persist through 2022, the desire to hedge against it using residential properties will remain strong, despite expectations that interest rates are set to rise further,” Savills noted in its sales report. of May 2022 in Singapore.
“The other reason why the market has so far been immune to hitherto and expected rate hikes is that the total debt service ratio had used a notional mortgage rate of 3.5% to calculate the quantum and duration of mortgages.”
Between January 2021 and May 2022, the one-month and three-month compound overnight supply rate in Singapore only increased by 0.5% and 0.29% to 0.75% and 0.46 %, respectively. Indeed, mortgagors pay around 1.5% to 1.6%. For fixed rates of two to three years, it is around 2.2% to 2.6%, which remains a significant difference compared to the TDSR rate of 3.5%.
Join the Singapore Business Review community
Since you are here…
…there are many ways to work with us to build awareness of your business and connect with your customers. Our team can help you create an advertising campaign, in print and digital, on this website and in a print magazine.
We can also organize a real or digital event for you and find keynote speakers as well as industry leaders, who could be your potential partners, to participate in the event. We also run rewards programs which give you the opportunity to be recognized for your achievements throughout the year and you can join this as a participant or sponsor.
Let us help you move your business forward with a good partnership!