Property Hunter Magazine Issue 63- February 2015 | Page 63

Base Rate To Create Stiff Competition Among Banks
About 80% of housing stocks is with
Housing Developers Board units while
20% in private housing market but this
20% plays a significant in the overall
market. When a project comes up,
the prices move up, and fingers point
towards the foreign buyers but the
reality is that, it is the Singaporeans
who are pushing up house prices.
Therefore, it all depends on what the
government wants, and how far they
want to drive prices down.

The research house expects the
implementation of the new BR
mechanism to stir up competition
among banks. Nonetheless, the
outcome will depend on the final
ELR being offered to borrowers.
Affin Hwang Research said it does
not think that the implementation
will significantly improve a banks’
bottomline over the longer run
though accepting customers with
a higher risk profile will enable a
bank to price the ELR higher and
hence earn a more profitable net
interest margins (NIM).

Int