Property: Housing affordability, measured by monthly repayments to income, can deteriorate from the current 43% to 49% if the effective mortgage rate
rises to 3%.
CLSA's channel checks suggest more homebuyers are opting for fixed-rate home loans compared to a year ago despite banks maintaining the credit spreads for their floating packages unchanged.
Tight employment and strong household balance sheets will mitigate price falls.
House believes there is room for the government to ease in 1H16. Top picks are CapitaLand (Buy, TP $3.96), City Dev (Buy, TP $12.16) and Frasers Centrepoint (Buy, TP $2.25).
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