The easing of some of the property cooling measures in March has resulted to renewed interest in the residential market, which witnessed higher take-up rates at launches and more active secondary market, reported Singapore Business Review citing Maybank.
Land tender bids also exceeded expectations, said Maybank analyst Ng Li Hiang.
“These are positive for bank lending to the housing and building and construction (B&C) sectors,” noted Ng.
In fact, the banking system’s domestic banking unit (DBU) housing loans accounted for 31 percent of advances at S$194 billion as at end 17 May.
Notably, housing and B&C loans constitute between 40 and 50 percent of the total loans of Singapore’s three giant banks, with housing loans accounting for between 21 and 27 percent as at the first quarter of 2017.
“In our assessment, housing loans remain an important lending segment for the three banks. Banks are prepared to tighten pricing to attract new borrowers, potentially limiting the upside to earnings.”
And in the event of sustained property transactions, Ng expects an upside to the current system loan growth assumption of six to seven percent.
This article was edited by Denise Djong.
