DBS bank’s property loans segment has dropped by 40 to 50 percent since the latest cooling measures were announced.
The government’s surprise property cooling measures in July 2018 had “more bite” than anticipated, with DBS bank’s property loans segment dropping by 40 to 50 percent – way below the bank’s forecast of a 20 to 25 percent reduction, said DBS CEO Piyush Gupta.
At the start of the year, the bank expected to add $4 billion to its mortgage loan book, reported Today Online.
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The figure was forecasted to drop to $2.5 billion to $3 billion following the implementation of the property curbs. However, the amount of property loans posted by the bank stood at under $2.5 billion only.
As part of the July cooling measures, the government raised the Additional Buyer’s Stamp Duty (ABSD) for individuals by five percentage points, while entities faced a 10 percentage point hike. The loan-to-value limits were also tightened by the government.
Despite this, Gupta still expects Singapore’s economy to grow by 2.5 to 3.0 percent this year.
He cited the interest rate hikes by the US Federal Reserve, trade tensions between the United States and China, Brexit, and China’s economic slowdown as the macroeconomic headwinds expected to hit the global markets this year.
And while Gupta foresees a slowdown in the global economy this year, as evidenced by the drop in the Purchasing Managers’ Index (PMI) in the US, Europe and China, he believes that this “does not portend any significant recession”.
The PMI measures the manufacturing activity within an economy.
“I don’t see any recession coming at all. I think the slowdown is part of the normal cyclical slowdown,” he said.
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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org