Brokers' take

Singapore property | Overweight

UOB Kay Hian, March 30

Positive carry still exists despite the sharp jump in mortgage rates but it is becoming increasingly difficult to rent out units. Affordability remains manageable with our sensitivity analysis indicating that every one percentage point rise in interest rates would result in the affordability ratio worsening by about four percentage points. Total Debt Servicing Ratio (TDSR) measure leaves room for another 100-150 basis points rise in interest rates before borrowers' ability to repay is impacted. We believe the market has overdiscounted the negative prospects for the residential segment and prefer deep value and diversified developers with Wing Tai and CapitaLand as our key picks. Maintain "overweight".