Firm property prices are a silver lining as rising interest rates batter listed property plays

Many homeowners may be fretting over how rising home loan rates are affecting disposable income. The three-month compounded Singapore Overnight Rate Average (Sora), has jumped by over 220 basis points from the start of the year to 2.45 per cent per annum as at Oct 28, 2022.

For a borrower who is paying 1 per cent plus three-month Sora on a million-dollar home loan with a 25-year tenure, the monthly repayment increases by over S$1,100 when the interest rate rises from 1.2 per cent per annum to 3.5 per cent.

Spare a thought for the listed property groups and trusts, which may be hit even harder by rising interest rates.

Adverse effects

First, higher interest rates add to costs and depress profitability....


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