Mortgage loan applications up 20% in Q1: Credit Bureau

Credit Bureau Singapore found that the average mortgage for people aged between 21 and 29 had the greatest quarter-on-quarter change among several age groups, rising 3.4 per cent to $347,636.
Credit Bureau Singapore found that the average mortgage for people aged between 21 and 29 had the greatest quarter-on-quarter change among several age groups, rising 3.4 per cent to $347,636.ST FILE PHOTO

They could have been boosted after Govt tweaked cooling measures in early March

More people applied for housing loans in the first three months of this year compared with the figure in the last three months of last year, according to a new report.

It found that mortgage loan applications rose 20 per cent in the three months to March 31 from the fourth quarter last year, said Credit Bureau Singapore (CBS), which compiles an index on consumer credit, yesterday.

The index studies consumer credit behaviour and how people use credit balances, as well as their payment delinquency and default rates in both secured and unsecured credit facilities.

Home loans are examples of secured facilities, while unsecured debt refers to loans with no collateral, like those racked up on credit cards or overdrafts.

The data showed mortgage applications grew the most in the first quarter, followed by motor vehicle loan applications, which rose 4.13 per cent.

CBS also found that the average mortgage for people aged between 21 and 29 had the greatest quarter-on-quarter change among several age groups, rising 3.4 per cent to $347,636.

Consumers aged between 30 and 34 had the most significant change in motor vehicle loans, with average borrowings up 5.1 per cent to $36,968.

  • 4%

    Growth of quarter-on-quarter motor vehicle loan applications

Home loan applications could have been given a boost after the Government tweaked some property cooling measures in early March, the first adjustments since the curbs were implemented in 2009.

For instance, the seller's stamp duty holding period for homes bought from March 11 was shortened to three years from four years.

After all, sales of new private homes surged to a near four-year high in March too.

As Ms Christine Li, research director at Cushman & Wakefield, previously noted: "Many are buying into the idea that Singapore's residential market is moving a step closer to a turning point."

CBS also noted that credit card applications fell 5.97 per cent, while those for personal loans dropped 5.94 per cent.

The competition to get into consumers' wallets is getting much tougher, which could be part of the reason for the fall in applications.

Personal finance portal MoneySmart found in its survey this year that people had an average of four cards last year, down from five in 2015, and said "credit card customers were becoming more selective".

However, credit card applications still made up 72 per cent of about 331,600 new credit applications across all facilities in the first quarter, with home loans next on 14 per cent.

People aged between 35 and 39 were doing better than others when it came to paying off debts, with their delinquency rate for credit cards falling 5.4 per cent quarter-on-quarter, while the personal loan rate dropped 8.74 per cent.

CBS said: "Consumers can obtain their own credit report to ensure that their credit health is in check."

A version of this article appeared in the print edition of The Straits Times on June 28, 2017, with the headline 'Mortgage loan applications up 20% in Q1: Credit Bureau'. Print Edition | Subscribe