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July rush to buy Singapore property may boost mortgages: DBS
DBS Group Holdings said that the recent race to buy property ahead of the Singapore government's latest price cooling measures may give a temporary boost to its mortgage business but in the longer term, the market is likely to slow down.
The country's largest bank expects "a slight ramp-up in mortgage financing requirements" in the next one or two months as a result of the July 5 rush to purchase apartments before the government measures take effect, according to Sim S Lim, DBS's Singapore country head.
About 1,000 condominium units were sold that evening in the hours between the government's announcement of a new property clampdown, and the midnight deadline when the curbs took effect, The Straits Times reported.
Singapore imposed higher stamp duties and tougher borrowing limits in a bid to cool speculative demand stoked by record land bids and redevelopment deals.
"These people who bought 1,000 units will be looking for mortgage financing," Mr Lim said on Thursday in an interview.
After that demand has been satisfied, the mortgage market will cool, though discounts from property developers will mitigate the downturn, Mr Lim said.
The impact on DBS will also be cushioned by the nature of the bank's customer base, which includes purchasers of government-subsidised housing and first-time buyers, he added.
Singaporeans purchasing first properties were exempted from the additional stamp duty. DBS had S$73.5 billion of housing loans at the end of March, some 31 per cent of the total Singapore market and up 14 per cent from a year earlier. BLOOMBERG