Authorities may tweak additional cooling measures due to possible price increase

RHB sees property prices to possibly rise 5% in the second half of 2022.

Authorities could revise additional cooling measures in a less likely event of property prices increasing another 5% in the second half of 2022, analyst, RHB, said.

“This could take the form of revising up medium term interest rate assumptions for calculating borrowers’ total debt servicing ratio to 4-4.5% instead of the current 3.5% and further lowering loan to value ratios,” said RHB.

These measures are intended as safeguards for buyers from getting wrong footed in an increasing interest rate environment and protect financial institutions, RHB noted.

Meanwhile, RHB said there is strong demand and record pricing in new launches at Lentor Modern.

But RHB warned that the pricing range on the launches could lead to demand uncertainty.

“The exact pricing will be determined closer to launch. The developer is likely to consult with marketing agents on prospective demand and will arrive at final prices based on feedback,” RHB said.

“This, in our view, shows that the developer may be uncertain of the strength of the demand especially considering that these will be the new benchmark prices for the area which is under developed currently,” it added.