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SG Khaw reminds buyers to exercise prudence

Property Here - Monday, May 06, 2013

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By Romesh Navaratnarajah:

Home buyers need to take future interest rate hikes into account when making decisions on property purchases, cautioned National Development Minister Khaw Boon Wan.

In the latest National Conversation for property, he reminded buyers that prices will not always move up.

“They assume two things. Property prices will keep going (up). Two, interest rates will keep on remaining low. Both are wrong and therefore one day, both will collapse on them.”

“So, if you are over-committed, let's say you can only afford a three-room flat, (but) you decide to buy five-room flat. Yes, based on today's interest rates you can afford a five-room flat. But, when interest rates go up as it will, you will no longer be able to afford a five-room flat and what will happen, your bank will start calling you up to please top up or sell your flat and that's when trouble starts,” Mr Khaw added.

The Minister also revealed that HDB is considering bringing back the kampong spirit by developing more common spaces for residents.



Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@allproperty.com.sg