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Singapore housing loans shrink again in April

Singapore housing loans shrink again in April

Housing loans in Singapore shrank for a third month in April, leading a continued contraction in consumer loans, preliminary data from the Monetary Authority of Singapore (MAS) showed yesterday.

Mortgages and bridging loans booked in April on a net basis came in at $202.76 billion, falling from $203.38 billion in March.

With housing loans making up roughly three-quarters of consumer lending, overall consumer loans stood at $264.57 billion, lower than the $264.67 billion in March.

Earlier this week, Minister for National Development Lawrence Wong told Bloomberg that almost a year after intervening to stem soaring property prices, Singapore has stabilised the property cycle. The measures are now in their 11th month.

“The property market last year, before the cooling measures were put in place, we saw prices rising very sharply,” Mr Wong said in an interview with Bloomberg Television’s Haslinda Amin in Singapore.

“There was a very real risk that prices would outpace fundamentals, and I think if that had happened, then eventually it would lead to a destabilising correction, and I think everybody would be worse off.

“It was, as we had stressed then, not to bring down prices but to stabilise and moderate the cycle, and I think we have achieved that effect,” he said.

Overall bank lending in Singapore was flat in April from a month ago, weighed down by the decline in consumer loans and moderated growth in business lending.

Loans through the domestic banking unit – which captures lending in all currencies, but reflects mainly Singapore-dollar lending – stood at $676.26 billion in April, roughly unchanged from the previous month.

The growth in business loans flattened, inching up to $411.69 billion from $411.47 billion in March.

Loans to manufacturers slipped 1.7 per cent month on month to $26.83 billion but lending to the building and construction sector rose 1.7 per cent to $138.9 billion. Loans to financial institutions dipped 0.7 per cent to $97.72 billion.

From a year ago, total lending in April rose 1.4 per cent, weaker than the 2.2 per cent year-on-year gains posted in March.