Singapore (VNA) – Aggregate household debt in Singapore fell forthe eight consecutive quarter to 1.2 times personal disposable income in thethird quarter of 2023, the lowest level in over a decade, the MonetaryAuthority of Singapore (MAS) said in its Financial Stability Review for thisyear.
MAS said households have exercised caution in taking on additional loans due tothe increase in interest rates since the second half of 2022, resulting in adecline in the amount of money they owe from a year ago. Interest rates in thecountry rose to more than 3.5% in the second half of 2023, from less than 0.5%in the first half of 2022.
Besides, income growth andfinancial buffers in the form of extra savings also cushioned rising debt servicingcosts for households, and helped keep non-performing loan rate and leveragerisks low.
MAS also said that household sector net wealth rose by an annual 7.6% to 2.7trillion SGD (over 2 billion USD) in the third quarter of 2023, largelysupported by sustained growth in liquid assets, including cash on hand or inbank deposits, and in the value of residential property assets.
The biggest drop has been in personal loans, which represent about a quarter ofthe aggregate household debt. Meanwhile,housing loans, making up about three-quarters of the aggregate household debt,grew at a subdued annual pace of about 1% in the third quarter as some existingborrowers paid down their mortgages.
The central bank warned that borrower should continue to exercise caution asinterest rates are likely to remain high. The advice comes as nominal wagegains are expected to moderate amid slower growth and global macroeconomicuncertainties in the quarters ahead./.
MAS said households have exercised caution in taking on additional loans due tothe increase in interest rates since the second half of 2022, resulting in adecline in the amount of money they owe from a year ago. Interest rates in thecountry rose to more than 3.5% in the second half of 2023, from less than 0.5%in the first half of 2022.
Besides, income growth andfinancial buffers in the form of extra savings also cushioned rising debt servicingcosts for households, and helped keep non-performing loan rate and leveragerisks low.
MAS also said that household sector net wealth rose by an annual 7.6% to 2.7trillion SGD (over 2 billion USD) in the third quarter of 2023, largelysupported by sustained growth in liquid assets, including cash on hand or inbank deposits, and in the value of residential property assets.
The biggest drop has been in personal loans, which represent about a quarter ofthe aggregate household debt. Meanwhile,housing loans, making up about three-quarters of the aggregate household debt,grew at a subdued annual pace of about 1% in the third quarter as some existingborrowers paid down their mortgages.
The central bank warned that borrower should continue to exercise caution asinterest rates are likely to remain high. The advice comes as nominal wagegains are expected to moderate amid slower growth and global macroeconomicuncertainties in the quarters ahead./.
VNA
