Singapore mortgage demand significantly dented

Romesh Navaratnarajah25 Jan 2019

property market singapore

Rising interest rates and new property cooling measures have significantly dented mortgage demand.

Rising interest rates and the government’s surprise property cooling measures in July have significantly dented mortgage demand at Singapore’s banks, threatening to further accelerate the decline in house prices, reported Bloomberg.

In the first 11 months of 2018, home loan growth in the city-state slowed to 1.9 percent, less than half of the 4.2 percent hike seen in 2017, revealed latest data from the Monetary Authority of Singapore.

More: A Beginner’s Guide To Mortgage Loans

DBS CEO Piyush Gupta noted earlier this month that the latest property curbs had affected mortgage demand. He revealed that the bank’s Singapore mortgage book increased by less than $2.5 billion last year, way below the $4 billion forecast at the start of the year.

Meanwhile, house prices fell for the first time in six quarters during the fourth quarter of 2018. DBS Group Holdings real estate analyst Derek Tan expects housing values to drop by as much as 3.0 percent this year, with new home sales dropping by 20 percent.

“I expect the overall property market outlook to be weaker in 2019,” said Royston Foo, an independent property analyst who publishes on Smartkarma. “Insecurity and bearish sentiment will result in potential buyers holding back purchases and adopting a wait-and-see approach.”

A China-led economic slowdown, volatile financial markets, rising mortgage rates and a surge in housing supply are all weighing on sentiment, he explained.

With this, Bloomberg Intelligence analyst Diksha Gera expects mortgage growth in Singapore to remain below two percent this year.

More: Financial Guide On Affordability: TDSR


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


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