Steady Rise In Property Loans

Source : TODAY, Tuesday, July 31, 2007

PROPERTY loans made up almost half of all loans in Singapore for the first half-year, a steady increase over the decade that reflected banks’ widened exposure to the real estate market amidst the ongoing property boom.

Outstanding property loans came to more than $94 billion, or 47 per cent of the total loan portfolio of commercial banks here, at the end of last month, the Business Times reported yesterday.

This contrasts with the 33 per cent from about a decade ago (end-1996) during the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

Housing and bridging loans made up some $64 billion as of June end, compared to about $63 billion six months ago, while building and construction loans were worth about $30 billion, up 21 per cent from a year earlier.

The increase in building and construction loans, which took a bigger share of the total loan pie, has also been much faster over the past few years. Loans to developers, under the building and construction category, are additionally risky due to the deferred payment scheme, which allows home buyers to pay only a fraction of the property price upfront.

The Monetary Authority of Singapore said its monthly statistical bulletin with banking data will come out today. — CHEOW XIN YI