While home values from the US to New Zealand are declining, Singapore’s private property prices jumped 13.2% in the third quarter from a year ago due to factors including a shortage of supply and an influx of expatriate arrivals. That’s fueled affordability concerns for nearly six in 10 potential buyers and tenants, according to a recent survey.
The trend is “credit negative” for Singapore-covered bonds —which include mostly loans for private residential properties —because it increases risks for new mortgages, Moody’s analysts including Daniel Gan wrote.
Increases in accommodation costs are “anticipated to stay firm” in future quarters amid strong demand for rental housing, the central bank and Ministry of Trade and Industry said in a joint statement on Tuesday. Authorities introduced measures in September to ensure homebuyers borrow prudently as rates rise.
