The lure of lower mortgage rates could fuel the property market and contribute to rising household debt, an area of concern for the government, the report adds.
A CLSA report suggests that property measures could be implemented if residential property prices continue to rise. Residential property prices rose 2.7% year-to-date for the nine months to end-Sept. Sales volume appears to be on track for 10,000 to 11,000 units for this year. New supply isn’t excessive at 36,814 units with around 50% pre-sold. Most buyers - 98%- are locals or permanent residents. The heightened interest in physical property is likely to be a result of low mortgage rates, suggests a CLSA report dated Nov 27. These are as low as 1.5%. Three-month compounded Sora is at 1.2496% as of Nov 27.
“With home sales volumes reaching new highs, since 2021, fuelled by falling mortgage rates and prices firming, we believe the government could potentially introduce further cooling measures on the residential market if price growth is viewed as excessive,” CLSA says, in its report.
