Rising interest rates in next 5-10 years

[gwlip]

For doing worst case scenario planning, what would be the maximum SIBOR be in 5-10 years time?

[ikan bilis]

let's say.... sibor spike up to 6-10%, how long can it tahan staying high-high there?? 3-6months ??... any high interest rate is likely to be some "spike"...

my feeling,...

first,
in 1997/8, the crash was like speculators offloading properties,... did not hear anyone selling bcoz cannot afford paying instalment...
when in 2003/4, during that prolonged recession, lost of jobs, no tenants,... then there were people cannot afford paying instalments, bank auction sales and etc...

second,
in 5-10yr times,... say,..your loan likely to be less than 15yrs, and may be pay down to left 500K only...
- 500K, 15yrs, 2%: monthly instalment = $3217
- 500K, 15yrs, 7%: monthly instalment = $4494
cannot afford meh ??...
(the shorter the balance loan tenure left, the least affected by interest rate fluctuations)



=> so, worst case scenario might be more of lost of income/jobs,... interest rate hike still can die-die tahan it lah...

[sh]

let's say.... sibor spike up to 6-10%, how long can it tahan staying high-high there?? 3-6months ??... any high interest rate is likely to be some "spike"...

my feeling,...

first,
in 1997/8, the crash was like speculators offloading properties,... did not hear anyone selling bcoz cannot afford paying instalment...
when in 2003/4, during that prolonged recession, lost of jobs, no tenants,... then there were people cannot afford paying instalments, bank auction sales and etc...

second,
in 5-10yr times,... say,..your loan likely to be less than 15yrs, and may be pay down to left 500K only...
- 500K, 15yrs, 2%: monthly instalment = $3217
- 500K, 15yrs, 7%: monthly instalment = $4494
cannot afford meh ??...
(the shorter the balance loan tenure left, the least affected by interest rate fluctuations)



=> so, worst case scenario might be more of lost of income/jobs,... interest rate hike still can die-die tahan it lah...

The cm requiring 40% down payment ensures that there will be little if any force sales... Prices need to come down 40% before that happens. And if there are no force sales, how are prices going to crash?

Even if interest go up, this interest on 60% loan, backed by 40% paid up. The rental return, only needs to support the 60% loan, not the 80 or 90% loan previously.....

So, to me, the 40% down rule provides a cushion to any downside, even preventing it from happening... Also eliminates the marginal speculators...

[leesg123]

The cm requiring 40% down payment ensures that there will be little if any force sales... Prices need to come down 40% before that happens. And if there are no force sales, how are prices going to crash?

Even if interest go up, this interest on 60% loan, backed by 40% paid up. The rental return, only needs to support the 60% loan, not the 80 or 90% loan previously.....

So, to me, the 40% down rule provides a cushion to any downside, even preventing it from happening... Also eliminates the marginal speculators...

True, but the problem could arise from those marginal investors who are already in it beforw the cm on 40% is in place.

[sh]

True, but before the 40% rule, there was the 30% rule. How much has prices gone up before the 40% rule, easily 20 to 30%... What was highly leveraged (at 20% or 30%) is now not so highly leveraged based on current value. To loan to value % is probably not too different from the CM imposed 60LTV now....

[Allthepies]

So now it is time to gather how many of the people bough before the 60%LTD rule. But those who bought before it should be sitting on healthy profit already?

[darkseed73]

Shanghai interest is 7%, I haven't see ppl die yet.



No wonder china ppl come Singapore and buy like nobody business. Cannot afford sell lor since it's PC it's free to sell anytime.

No wonder Singaporean cannot make it overseas, by the time u worry this and that the boat has sail.

Most ppl realize that but it's too late therefore now they can afford, all grab like nothing.

[lifeline]

Happy New Year Devilplate !!!
Please come back and post regularly under your original nick.

[Shanhz]

True, but the problem could arise from those marginal investors who are already in it beforw the cm on 40% is in place.

no proof, but those who bot prior to the 40% CM could have higher valuation on their ppty already. so it takes a larger correction to hit them. furthermore still alot on the sidelines waiting for mkt to soften and they provide the support for the prices. of coz, if it goes straight for hard landing, then hard to say.

anyway each time it is different.. yet, each time, it is the same. either way, we are f-ked. don't think too much, if can afford, just whack lor. (sure kenah flamed)

[buttercarp]

Happy New Year Devilplate !!!
Please come back and post regularly under your original nick.

Ya hor, just realized that DP also voted which means he is still much alive and kicking !