Home loan applications at OCBC Bank have declined by 20 percent since the government implemented new measures to curb the property market, said David Conner, chief executive at OCBC Bank.
However, Mr. Conner noted the bank’s home-loan portfolio should continue to expand, albeit at a slower pace.
“Housing loan applications are down about 20 percent, after the August measures. That isn’t necessarily a clear indicator of how the mortgage loan book will grow,” he said.
“For the last 18-24 months, there have been lots of launches of properties that were going to be completed over a three-year period, so the borrowers would have ongoing completion payments to make, so they would draw on loans.”
OCBC’s mortgage book also includes mortgage refinancing, where borrowers switch mortgage from other banks to OCBC to refinance their home loans.
“On the whole, we still expect the total outstanding to continue to increase, but at a slower rate,” said Soon Tit Koon, CFO at OCBC.
Housing loans have been the major driver of Singapore-dollar bank loan growth throughout the economic crisis and since the recovery. According to The Business Times, housing loans contributed nearly 80 percent of the total growth of Singapore-dollar bank loans from 2008 to end-September.
It added that at OCBC, housing loans, including those outside Singapore, contributed 30 percent of its overall loan growth over the same period.