Interest Rate Hikes & the Property Market
Based on events of a similar nature in the past, we can observe that in the majority of periods measured after a 1st Federal Reserve Rate Hike, the Singapore property market has continued rallying.
To be precise, in all 8 events, 75% of the time the market has rallied in the following 3, 6 and 12 months periods. On the back of oil and commodities price spikes in recent months, interest rate hikes may have to be tapered to prevent over stalling the economy.
In the most recent major Global Financial Crisis in 2008 before COVID, it took 10 years before interest rates reached the 2% mark.
Therefore, low interest rates may be here to stay for much longer than the media forecasts. While the past does not necessarily predict the future, historical probabilities favour a bullish view on the market as the global economy gets back its footing and "Live With Covid" becomes a way of life.