1. Singapore Home Prices Climb Despite Increased Borrowing
- Singapore real estate sales maintained a brisk pace of increase in the third quarter, driven in large part by foreign demand especially from North Asia as the financial center reopens.
- Private property values rose 3.4% from the previous three months, when they climbed 3.5% and prices also jumped 13.2% from a year earlier.
Last week saw over 302,000 spectators at the Singapore F1 Grand Prix, over 90,000 delegates at various other events, including Token 2049 and the Forbes CEO Conference, Singapore’s back in business in a big way, opening its stage in the biggest post-Covid party.
Which goes some way to explain why even as the U.S. Federal Reserve and other central banks take aggressive steps to contain soaring inflation, and borrowing costs in Singapore have surged alongside global rates, demand for real estate in the city-state remain insatiable.
Last week, Singapore authorities tightened housing loan limits to ensure borrowers are better able to afford higher rates, including imposing a 15-month waiting period for some buyers of resold units.
However, the moves aren’t likely to have a significant impact on home prices as Singapore real estate sales maintained a brisk pace of increase in the third quarter, driven in large part by foreign demand especially from North Asia as the financial center reopens.
According to flash estimates released by Singapore’s Urban Redevelopment Authority on Monday, private property values rose 3.4% from the previous three months, when they climbed 3.5% and prices also jumped 13.2% from a year earlier.
The price increases have come despite the three-month compound average Singapore overnight rate - used by banks to set interest rates for mortgages - jumping to about 2% from 0.2% at the start of the year.
Singapore’s buoyant housing market has largely defied a global downturn triggered by steep rate hikes which shows that some home buyers are discounting the risks of rising interest rates and possible economic slowdown.
Meanwhile, U.S. home values have dropped for the first time in a decade, while the once white-hot Sydney market saw prices slump for the eighth straight month in September.
Some analysts even forecast the Singapore home prices to climb between 7% and 9% for the whole of 2022 as demand outstrips supply and owing to the pandemic having delayed a slew of projects.