The record-low mortgage rates that are enjoyed by Singapore home buyers may soon be over, said economists.
Several economists expect interest rates to climb next year, attributed largely to the increase in forecasted interest rates in the US.
According to a survey of 22 economists conducted by the Monetary Authority of Singapore (MAS), the three-month US-dollar Singapore Interbank Offered Rate (Sibor) will likely increase 0.2 percentage point to 0.5 percent in 2011.
Meanwhile, the three-month Singdollar interbank rate is also projected to jump to 0.7 percent from the current 0.5 percent.
Economists have predicted interest rates hikes since they expect the US to increase mortgage rates and tighten monetary policy towards the second half of 2011.
“There is an upward bias of interest rates in the US, and although I don’t expect the rates there to jump to 3.5 percent any time soon, rates are on an upward trend,” said Leong Wai Ho, an economist at Barclays Capital, citing that Singapore rates follow closely with the US rates.