Rising interest rates may not stop home prices from rising
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THE effects of property cooling measures introduced in mid-December 2021 appear to be short-lived. The Urban Redevelopment Authority’s flash estimate of private home prices for Q2 2022 showed prices up 3.2 per cent quarter on quarter, versus the 0.7 per cent rise in Q1 2022. Year-on-year, private home prices rose 10.3 per cent.
Property consultants such as CBRE and Huttons have raised their private home price growth forecasts for 2022 from 3 per cent to 5 per cent and 8 per cent respectively.
However, homeowners and new home buyers may be in for a rocky ride amid rising home loan rates here. To combat escalating inflation, the United States’ Federal Reserve raised its benchmark interest rates by three-quarters of a percentage point in mid-June. Further rounds of interest rate hikes are expected from the Federal Reserve.
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