First-time homebuyers in Singapore will face declining affordability

First-time homebuyers in Singapore will face declining affordability.

Moody’s Investors Service says that rising home prices and interest rates will make it harder for Singaporean families to buy a home next year.

The experts at Moody’s produced a report on Tuesday that discussed the percentage of a household’s monthly income. It is required to meet the monthly mortgage payments on new loans.

For first-time private homebuyers, this number was 19.4% in August and 17.3% in December 2021.

They went on to say that this metric will get worse over the next year because wage growth alone won’t be enough to keep up with rising home prices and interest rates.

Private property prices in Singapore went up by 13.2% in the third quarter compared to the same time last year. This is in contrast to the United States and New Zealand, where home values have been going down.

A recent survey found that this has made almost six out of ten people who want to buy or rent worried about their ability to do so.

Several Moody’s analysts, including Daniel Gan, have said that the current trend for Singapore covered bonds, which are mostly loans for private homes, is “credit negative.”

On Tuesday, the central bank and the Ministry of Trade and Industry released a joint statement saying that rent increases will “remain stable” over the next few quarters because of strong demand.

The government took action in September to make sure homebuyers were borrowing responsibly in the face of rising interest rates.



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