Buying S'pore or HK property? Watch Fed moves

Singapore

INVESTORS seeking to buy property in Singapore or Hong Kong this year may be better off listening to US Federal Reserve chair Janet Yellen than a real estate agent. The Fed is widely expected to raise interest rates sometime in the second half of 2015 as the US economy improves and inflation remains benign.

As interest rates rise, property prices in Hong Kong and Singapore may fall by as much as 5 per cent this year, according to a report on prime residential real estate in the region by property consultant Knight Frank. In Hong Kong, where the local dollar is pegged to the greenback, a rate hike would lift floating mortgage rates, pressuring property prices.