A new property loan index has been launched by the Credit Bureau of Singapore.

A new property loan index has been launched by the Credit Bureau of Singapore.

It is aimed at, among others, to track loan delinquencies and demand for housing credit.

But the information will also make it easier for market watchers to read trends in the property sector.

The new property loan index will come in handy, providing additional useful information for property market-watchers.

It covers details such as credit delinquency, loans approval and credit demand and it already shows a drop in demand for housing credit over the past four months.

In May, the total number of loan applications was 17,300, or 72 per cent above the baseline.

That tapered down to just 38 percent, or 13,870, by end-August.

Mark Rowley, General Manager, Credit Bureau Singapore, says: “Obviously if we see demand tapering off, that’s likely to lead to property prices tapering off sometime in the future. So, I think that is it’s significance for consumers. Certainly, for the banks themselves, they’re looking at indicators such as delinquency to ensure that the risks isn’t escalating in the markets.”

The numbers also show that Singapore lenders have been keeping a tight rein on housing mortgages.

Bank loan approvals stood at a positive 22 percent above baseline, lagging behind credit demand at positive 59 percent.

For every loan that was approved, about two others were rejected.

The credit bureau also revealed figures for mortgagees with more than one property loan.

The number jumped from 23,541 last June to 38,520 this June.

There are also more people who owe over S$1 million each in housing loans.

Mark Rowley says: “I think it’s indicative of the market over the past year, quite a significant increase - 60 odd per cent increase in the number of consumers that have more than one property loan. So, yes I think it’s evident of the heat that we’re seeing in the market at the moment.”

The property loan index will be updated monthly.

Besides the personal loan index, the bureau will also be coming with indices for credit card, motor vehicle and personal loans so we have a better picture of the credits risks and health of Singaporeans.

Source : ChannelNewsAsia - 13 Sep 2007