Housing loans lift bank lending in December amid rising home prices

Singapore

HOUSING loans in Singapore extended its growth streak for the fourth straight month last December, on the back of rising private home prices.

On a monthly basis, housing loans - which make up three quarters of consumer lending - climbed 0.4 per cent to S$201.36 billion in December, consequently lifting total consumer loans by 0.5 per cent to S$259.62 billion, data from the Monetary Authority of Singapore showed on Friday.

This comes as prices of new private homes in Singapore rose 2.1 per cent in the fourth quarter of 2020 from Q3, marking their steepest quarterly increase in over two years. The latest uptrend was mainly driven by non-landed properties in the rest of central region and core central region, as reported by The Business Times earlier this month.

Other consumer lending segments also saw an uptick in December.

Unsecured personal loans, excluding credit cards, grew 0.6 per cent to S$37.82 billion month on month. Car loans were up 0.2 per cent to S$8.35 billion, while credit card loans rose 1.7 per cent to S$10.31 billion.

Loans for share financing remained the only segment to buck the trend, down 0.8 per cent month on month to S$1.78 billion in December.

Overall, loans through the domestic banking - which captures lending in all currencies, but reflects mainly Singaporedollar lending - rose 0.3 per cent to S$678.72 billion in December, compared with S$676.67 billion in November.

In December, loans to businesses ticked up 0.2 per cent month on month to S$419.12 billion to reverse an eight-month decline. This comes even as loans to the single-largest business lending segment - building and construction - fell 0.6 per cent to S$149.99 billion.

Loans to financial institutions were up 4.9 per cent to S$101.34 billion to end a four-month contraction, while loans to business services came in flat at S$11.30 billion.

Loans to professionals and private individuals also grew 0.9 per cent to S$9.09 billion.

However, loans to general commerce and the transport sector contracted month on month in December, down 1.6 per cent to S$62.57 billion, and 2.2 per cent to S$25.20 billion, respectively.

Loans to the manufacturing sector saw a similar trend, down 0.3 per cent to S$26.02 billion, while loans to others fell 5.2 per cent to S$31.29 billion.

Year on year, total business loans were down 2.4 per cent, while consumer loans slid 1.2 per cent. Overall, total bank lending in December fell 2 per cent.