Blocks of condominium in Singapore, on Sunday, May 15, 2022. Singapore is scheduled to release its first-quarter gross domestic product (GDP) figures on May 19.Blocks of condominiums in Singapore. The rising cost of borrowing is unlikely to have a major impact on Singapore’s property market, analysts told CNBC.

Analysts told CNBC that the rising cost of borrowing isn't likely to have a big impact on Singapore's property market.

Wealthy buyers, strong rental demand and foreigners moving to Singapore are some of the factors that make that happen.

Christine Li is the head of Asia-Pacific research at Knight Frank. She told CNBC over the phone that it is similar to markets like Beijing and Shanghai where a lot of people buy properties with small loans.

She said that Australia and New Zealand have different dynamics. People buy their homes in those markets because of income growth, so when interest rates start to hike, you can see that the reaction is much more immediate.

[The] interest rate is not going to be a determining factor for prices to come down.

According to local media reports, fixed home loan rates have gone up as much as 3.85%.

In wealth-backed markets like Singapore, interest rates don't move the needle because people don't rely on borrowing to fund their homes

All-cash offers were on the rise, according to a property agent.

Li said interest rates won't be a determining factor for prices to come down. It's important for people to realize that entering a market at this kind of price level may not give them the returns they want.

Christine Sun, senior vice president of research and analytics at OrangeTee and Tie, said that buyers in the top wealth brackets in Singapore have enough money to buy a house.

She said that foreign investors may continue to buy properties here because of the low mortgage rates and strong Sing dollar.

It doesn't mean the residential property market ignores rising rates and looming risks.

He said that there are other factors that cause prices to power on.

Private residential property prices increased 3.4% in the third quarter of this year compared to the previous quarter, according to data from the Urban Regeneration Authority of Singapore.

Strong household balance sheets and sustained income growth support demand for housing.

The safe haven status of Singapore and her acceptance of relevant talents have been attracting high income foreigners who can easily outbid locals in residential real estate.

Analysts said that new measures introduced by the government a few weeks ago will likely have a negative effect on the market.

There are tighter limits on loans and a 15-month wait-out period for certain private homeowners.

Sun from OrangeTee said that the wait-out period could affect the sales of public flats.

She said that the property market is usually rebound within six months after a cooling measure is put in place.

The government intervention has not been too restrictive or ahead of the curve.

He said that it was pointless because the potential market participants would eventually re-enter the market with a vengeance.

There is a lag on the supply side when demand goes up. As demand returns, prices will go up or down.

Sun said that real estate prices are expected to increase, but at a slower rate than in 2020.

Overall private home prices are expected to increase by 7 to 9% this year.

Knight Frank's Li said that strong growth in rents could improve sentiment in the market and support demand from both investors and those who buy homes to live in.

The low unemployment rate and the relocations of a lot of expatriates may be able to support the residential market.