Incidents in Neighboring Countries RI: Mortgage Rises, Residents "Don’t Care"
Jakarta, CNBC Indonesia - The increase in interest rates does not seem to have any effect on residents of Indonesia's neighboring country, Singapore. This is at least believed by local analysts.
Several factors are the cause. Like buyers who are indeed wealthy, demand for rent is strong and many foreigners are moving to Singapore.
According to the Head of Asia-Pacific Research at Knight Frank, Christine Li, Singapore's real estate market is indeed underpinned by "prosperity". This, he said, is like buyers in China's Shanghai and Beijing who require little or no borrowing.
"This is different from markets like Australia and New Zealand," he said, published by CNBC International, Thursday (27/10/2022).
"People are buying houses because of income growth. So when interest rates start to go up, you can see the reaction ... much more quickly," he stressed.
It should be noted that banks in Singapore have just raised their interest rates. DBS, IOB, OCBC raised mortgages by 3.85% earlier this month.
"But in a wealthy-backed market like Singapore, interest rates don't move the needle. Because these people don't even rely on loans to fund these homes."
"Interest rates aren't going to be the determining factor in prices going down... I think you need something much stronger, especially from a macro standpoint, for people to realize that entering the market at these price levels may not give them the returns they want, " he explained again.
The same goes for Senior Vice President of Research and Analytics at OrangeTee and Tie. He said buyers, especially in Singapore's top wealth group, had enough cash to fund their home purchases and could reuse capital to repay their loans.
"Foreign investors can continue to buy property here because they perceive our mortgage rates to be lower than in other countries," he said.
"Our strong Singapore dollar can help maintain the value of their investment," he added.
However, Alan Cheong, Executive Director of Research and Consulting at Savills, has a different opinion. According to him, it does not mean that an established market makes interest rate hikes ignored and reduces risk.
"There are other factors that cause prices to continue to rise, which seems to go against the logic of the economy," he said.
According to the Urban Redevelopment Authority of Singapore, private residential property prices are still in an upward trend. It even increased 3.4% in the third quarter (Q3) 2022.
This prompted the Singapore government to issue a number of policy measures. This includes stricter loan restrictions and a 15-month waiting period for certain private homeowners.
The waiting period may affect the sale of general flats. This, it is believed, in turn, could lead to a decrease in demand for suburban condominiums.
https://www.cnbcindonesia.com/news/20221027142037-4-382996/kejadian-di-negara-tetangga-ri-kpr-naik-warga-masa-bodoh
Several factors are the cause. Like buyers who are indeed wealthy, demand for rent is strong and many foreigners are moving to Singapore.
According to the Head of Asia-Pacific Research at Knight Frank, Christine Li, Singapore's real estate market is indeed underpinned by "prosperity". This, he said, is like buyers in China's Shanghai and Beijing who require little or no borrowing.
"This is different from markets like Australia and New Zealand," he said, published by CNBC International, Thursday (27/10/2022).
"People are buying houses because of income growth. So when interest rates start to go up, you can see the reaction ... much more quickly," he stressed.
It should be noted that banks in Singapore have just raised their interest rates. DBS, IOB, OCBC raised mortgages by 3.85% earlier this month.
"But in a wealthy-backed market like Singapore, interest rates don't move the needle. Because these people don't even rely on loans to fund these homes."
"Interest rates aren't going to be the determining factor in prices going down... I think you need something much stronger, especially from a macro standpoint, for people to realize that entering the market at these price levels may not give them the returns they want, " he explained again.
The same goes for Senior Vice President of Research and Analytics at OrangeTee and Tie. He said buyers, especially in Singapore's top wealth group, had enough cash to fund their home purchases and could reuse capital to repay their loans.
"Foreign investors can continue to buy property here because they perceive our mortgage rates to be lower than in other countries," he said.
"Our strong Singapore dollar can help maintain the value of their investment," he added.
However, Alan Cheong, Executive Director of Research and Consulting at Savills, has a different opinion. According to him, it does not mean that an established market makes interest rate hikes ignored and reduces risk.
"There are other factors that cause prices to continue to rise, which seems to go against the logic of the economy," he said.
According to the Urban Redevelopment Authority of Singapore, private residential property prices are still in an upward trend. It even increased 3.4% in the third quarter (Q3) 2022.
This prompted the Singapore government to issue a number of policy measures. This includes stricter loan restrictions and a 15-month waiting period for certain private homeowners.
The waiting period may affect the sale of general flats. This, it is believed, in turn, could lead to a decrease in demand for suburban condominiums.
https://www.cnbcindonesia.com/news/20221027142037-4-382996/kejadian-di-negara-tetangga-ri-kpr-naik-warga-masa-bodoh
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