Banks to sustain rise in residential mortgages over the next 12 months
Banking system property loans went up 2.3% in July 2022.
Property loans from banks could stay moderate but will still grow in the next full year, which is boosted by the decline of loans for sales booked in 2021, RHB said.
In a brokerage report, RHB said property loans went up year-to-date (YTD) 2.3% in July 2022.
“This compares favourably against the flattish consumer loans and 1.3% YTD increase in business loans over the same period,” said RHB.
As to the increase in interest rates, RHB sees that home buyers’ demand for properties will be steady even if there are higher interest rates.
With this, RHB said there will be a rebound in residential properties, especially the mass market residential properties.
It cited data that underlying demand for owner-occupied homes is still healthy by the 31% QoQ growth in number of sold private homes in the second quarter of 2022, compared to 39.5% decline in the previous quarter.
Currently, DBS and OCBC Bank are the top picks by the analyst. It also noted that the local banks’ decision to pull fixed-rate mortgages off their shelves stemmed from the higher than expected rate of the US Federal Reserve.