UNCERTAINTY OVER IMPACT OF LOAN REGULATIONS

UNCERTAINTY OVER IMPACT OF LOAN REGULATIONS
Nov 2, 2012
     
It is still unclear whether the new home loan regulations from the Monetary Authority of Singapore (MAS) will affect mortgage lending in the country, which grew 10 percent year-to-date, said Piyush Gupta, Chief Executive of DBS.

Nevertheless, total mortgage lending at DBS, Singapore’s largest home loans bank, grew by more than eight percent year-on-year. Year-to-date, home loans rose by seven percent to S$44.1 billion, reported The Business Times.

Moreover, the bank’s total loan book rose nine percent year-to-date, driven by property and corporate loans, while housing loans contributed 25 percent of total loan growth, Gupta said.

He also noted that the last two macro-prudential measures had slowed mortgage growth for two to three months, but it increased after that.

Meanwhile, the latest measures which slashed the loan-to-value (LTV) ratio significantly, could result in more borrowers pulling out due to higher monthly instalments. For borrowers with no outstanding mortgages, the LTV is now 60 percent; while for borrowers with outstanding loans, the LTV was brought down from 60 to 40 percent.

Preliminary figures from MAS show that loans granted by local banks came in at S$472.3 billion at the end of September, slower than the 2.3 percent growth in August. The biggest consumer loan category, housing and bridging loans, increased 1.2 percent month-on-month and 14.5 percent year-on-year.

Info courtesy - PropertyGuru.com.sg