The volume of new loans approved in the second quarter dropped 4.2 percent, indicating that the government’s property cooling measures have affected demand for new mortgages.
According to the Monetary Authority of Singapore (MAS), around S$12.86 billion in new housing loans were approved in Q2, down from S$13.42 billion in Q1.
A breakdown showed that new loans approved for owner-occupied property fell further than those for investment property. New loans approved for owner-occupied property fell 5.3 percent to S$9.29 billion in Q2, from S$9.81 billion in Q1. Meanwhile, housing loans for investment property stood at S$3.57 billion, down 1.3 percent from S$3.61 billion in Q1.
Based on loan limits granted, the volume of outstanding home loans approved for owner-occupied property climbed 4.5 percent to S$101.64 billion in Q2, from S$97.28 billion in the previous quarter. This was attributed to new housing loans granted and repayments made on existing loans during the second quarter.
Overall, the average loan-to-value (LTV) ratio for housing loans rose slightly to 44.3 percent in Q2, from 44.1 percent in Q1. The average LTV was based on a MAS survey of housing loans from selected financial institutions, which accounted for over 90 percent of total outstanding housing loans.
In addition, the non-performing loan ratio for housing and bridging loans remained unchanged at 0.4 percent in Q2. Applications for new mortgages fell significantly after the government implemented additional cooling measures to curb speculation in the residential property market.
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