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SG S'pore home loan growth slows: MAS

Property Here - Thursday, December 05, 2013

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Property cooling measures are main reason for the slowdown. 

Growth in the home loans market slowed to 12 percent in September, down from the peak growth of 22 percent in September 2010, according to the annual financial stability report released by the Monetary Authority of Singapore (MAS) and reported in the media.

The MAS report also revealed that a total of S$8.8 billion in new mortgages were granted in Q3 this year, compared to last year’s S$13.5 billion. 

“The share of new housing loans with loan-to-value (LTV) ratios higher than 70 percent has also fallen from a peak of 77 percent in Q2 2010 to stabilise at about 66 percent since 2012. The average LTV ratio of outstanding housing loans was 47.3 percent as of Q3 2013. The asset quality of property-related loans remains robust with the NPL ratio being less than 0.5 percent as of Q3 2013,” the report said. 

This shows that the property cooling measures implemented by the Singapore government is slowing the growth of household debt, especially for mortgages. 

“The series of cooling measures, especially with the debt servicing ratio, has been effective to date. It has led to moderation in terms of housing loans growth and also a moderation of property prices. So we believe that the government stands ready to implement more cooling measures until their price stabilisation objectives have been met,” noted Ivan Tan, Director of Financial Institutions Ratings at Standard & Poor’s. 

Aside from that, Singapore’s household net wealth – defined as household assets minus household debt – has climbed at an average rate of 9.1 percent per annum in the last ten years. In fact, it reached S$1.44 trillion in Q3 2013, or four times the country’s GDP. 

The primary reason for this significant increase is that property assets comprise a huge portion of household assets, and property prices have surged in the past few years. 

“On an aggregate basis, the value of property assets, estimated at S$838 billion in Q3 2013, accounted for about half of household assets. This share has remained broadly stable since 2010. The value of property assets has increased by an average of 13 percent year-on-year since Q1 2010,” MAS said. 

However, the value of financial assets has outpaced the growth of property assets since Q3 2012 due to a slower growth in property prices. 

“As of Q3 2013, the value of financial assets stood at S$875 billion, up 7.7 percent from a year ago. In comparison, the value of property assets was 5.8 percent higher than that of the corresponding quarter last year,” the central bank added. 

Moreover, the growth in the value of financial assets such as deposits, cash and Central Provident Fund (CPF) savings remained healthy at an annual growth of around 10 percent in Q3. 

Although the growth of Singapore’s household debt has slowed in recent quarters, MAS pointed out that mortgages account for 74 percent of total household debt. Nevertheless, this proportion is still roughly similar to that of other developed countries such as the US, the UK, Australia, Taiwan and Hong Kong. The next largest component after mortgages is car loans, which comprised 4.6 percent of total household debt in Q3. 

However, some Singaporean families who may have over-borrowed by taking out a bigger car loan or unsecured credit remain vulnerable should interest rates spike, cautioned MAS. 

“The generally benign environment of moderate economic growth, tight labour market conditions and low interest rates could change in the period ahead. These could pose strains on some households,” it said. 

In addition, the average outstanding debt owed by individuals seeking credit counselling increased from S$69,600 to S$79,700 in the in the last four years, revealed data from Credit Counselling Singapore (CCS). 

The number of individual bankruptcy orders has also been rising from roughly 1,500 cases in 2011 to around 1,700 cases in 2012. This trend continued in the first nine months of 2013 compared to the same period a year ago. 

“Over-leveraged individuals and households would be more vulnerable to adverse shocks. If the economy slows down and labour market conditions become less favourable, the property cycle could turn. Some households’ financial resilience could deteriorate – the value of their assets could fall even as their debt-servicing burdens increase in tandem with rising interest rates as advanced economies embark on monetary policy normalisation,” explained MAS. 

Furthermore, MAS believes that property prices are still too high even though the government’s cooling measures have curbed the sector’s momentum. As a result, the government will continue to monitor the market and act if necessary.

SG Luxury home prices may fall 6%: report

Property Here - Wednesday, August 21, 2013

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Singapore’s primary housing markets will see prices decline in the next 12 months due to a combination of higher mortgage rates and recent government policies, revealed a Jones Lang LaSalle report.

The luxury prime market could witness a four to six percent price fall, while the typical prime market may post a two to four percent correction. 

The consultancy expects “continued interest in fixed rate mortgages and, as reported in last quarter’s publication, a growing number of property buyers are looking to lock in fixed repayment rates to hedge against any rate increases”.

As such, demand and prices in the high-end segment will be affected, especially by higher holding costs and the rising Singapore Interbank Offered Rate (SIBOR).

The report added that demand for resale condos in the prime market slipped 3.3 percent in the second quarter to 171 units from 177 previously. The decline was due to cooling measures which dampened foreign demand, as well as the introduction of the Total Debt Servicing Ratio (TDSR).

“We expect prices and transaction volumes are likely to dip in the near term as a result of tightening credit availability,” Jones Lang LaSalle said.

As for supply, last quarter saw the completion of two projects which delivered 207 units, down 43 percent from Q1 based on data from the Building and Construction Authority (BCA).

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email

SG Global prime residential rents up 5.1 percent

Property Here - Wednesday, April 03, 2013

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By Nikki De Guzman:

Prime residential rents in key global cities increased 5.1 percent last year compared to 3.5 percent in 2011, according to a report from Knight Frank.

This was a result of potential purchasers shifting to rental accomodation, supported by the strict mortgage market along with limited supply in established markets and soaring prices in emerging markets.

Knight Frank’s Prime Global Rental Index, which compares the performance of high-end lettings across key cities worldwide, now stands 20 percent above its financial crisis low in spring 2009 with Hong Kong seeing the strongest growth of 42.2 percent while Moscow recorded the smallest uptick of 3.3 percent. 

“Despite the fragility of the global economy, only London, out of the 16 cities tracked by the index (which includes Tokyo for the first time this quarter) recorded a decline in rents in 2012. The UK capital saw rents fall by 3.2 percent in 2012 as the Eurozone’s on-going turbulence, combined with the uncertainty in the financial sector, kept activity muted,” said Kate Everett-Allen from International Residential Research at Knight Frank.

In Asia, recent property measures introduced by the government helped shift demand to the rental market. As such, prime rents in Hong Kong, Singapore and Beijing moved up 4.9, 0.7 and 2.5 percent in Q4 2012 respectively.

The report added that a challenging business environment has affected housing allowances for expatriates globally, pushing corporate tenants to look for smaller units given their budget constraints.


Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email

SG S'pore's estates to become denser by 2030

Property Here - Friday, February 01, 2013

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By Romesh Navaratnarajah:

The future success of the government’s land use plans will depend on market timing and clarity on the details of development, said Alice Tan, Senior Manager for Research at Knight Frank Singapore.

“To fulfil the optimisation of land use in the medium to long term, we expect the planners to be reviewing land usage in a comprehensive approach, from existing low intensity to higher intensity land use.”

Around 13,000ha, or 17 percent of the 76,600ha land supply announced by the Ministry of National Development (MND) will be set aside for housing. 

Jones Lang LaSalle (JLL) noted that with the growing population expected to hit 6.9 million by 2030, the density per unit area for different land use groups will naturally increase. For housing, density will climb from 508 to 531 persons per ha. 

But the new areas identified under the plan – Bidadari, Tampines North, and Tengah – will help support the overall population growth.

Dr. Chua Yang Liang, Head of Research South East Asia and Singapore at JLL, said: “While these indicators suggest a higher density of person per unit area, there will be an opportunity for the real estate industry to innovate and create more conducive urban environment through clever urban designs and integration of complementing land uses such as the injection of greater green and public spaces into the urban fabric to mitigate this density.”

Meanwhile, with the Southern Waterfront City mentioned as an upcoming growth area, there will be opportunities for home buyers to “own premium water-facing homes near to the city,” said Knight Frank’s Tan.


Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email