Homeowners cash in as property refinancing surges

The local property market has been a cash cow for investors, with property valuations growing year on year especially in the residential segment. This growth in valuations has given property owners more equity as they can now borrow against the rising value of their homes and benefit from low-interest mortgage loans as compared to high-interest unsecured personal loans.

A household indebtedness survey carried out by researchers at the central bank found that mortgages issued by banks were increasingly going to refinancing existing properties as opposed to financing new developments. Researchers at the central bank lauded this move as a growth in the local market but also warned against potential bubble bursts if the economy goes south.