We examine three related issues in the housing market:
1) Eventual rise in interest rates: The prolonged low-rate environment may have lulled home buyers or borrowers into a sense of normalcy, and some segments may be ill-prepared when rates eventually rise;
2) Rising households’ debt burden: Sound aggregate household (HH) debt levels mask three pressure points:
a) 2010-12 HH debt grew more than 10 per cent per annum
b) a sharp rise in HHs with multiple loans
c) the rising income gap
3) New Total Debt Servicing Ratio (TDSR) framework: This effectively punctuates the unwinding of credit now, not in 2015 when rates rise.
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Source from BTInvest
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