Rising interest rates for Sol Acres according to some consultants will have little or no effect on the ability of home buyers to meet their monthly payments.
Housing demand will drop with the rise in mortgage costs, but this downturn is not expected to be significant. Grace Ng of Colliers international’s deputy managing director was quoted as saying, “”This is because interest rates are expected to remain low given that the US economy has yet to see full recovery and Europe has just announced a series of stimulus measures.””
Sol Ares EC by MCL Land
Banks have to adjust their eligibility requirements for buyers as the TDSR is mandating a higher interest rate of 3.5% on loans for Sol Acres.
This means that owners who have overcommitted to high priced loans or own multiple units may face a further “”cash crunch””, added Ng. Collier’s estimates around 78,402 units will be completed by 2018 and that 20,824 units will be completed by the end of this year.
Choa Chu Kang EC Sol Acres
“”If for a prolonged period, these property owners are not able to rent out their properties and service their mortgage loans, the market could see more mortgage sales this year,”” she went on. The number of mortgage sales listings is expected to increase from 160 in 2014 and reach 200 4th quarter 2015.
Ng feels that investors were better able to manage their cash flow for Sol Acres will be better off renting the property out even at lower rent in order to at least have some income to service their mortgage payments. This would be a more viable solution been selling their units at a loss.
Sol Acres EC
For homeowners who are living in their properties, Ng notes this is the right time to focus on their preferred property. She goes on to say a further 5 to 8% slide in private home prices and a 10% drop in the luxury market prices this year may offer a good opportunity for homebuyers.