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Published July 30, 2011

New home loans in Q2 down 4.2% from Q1

MAS data also shows new loans granted for owner-occupied property fall more than loans for investment property

By CONRAD TAN


THE volume of new home loans granted in April-June fell by 4.2 per cent compared to the first quarter of this year, suggesting that the slew of government measures to cool the property market here have cut demand for new home loans.

Just $12.86 billion in new housing loans was granted in Q2, down from $13.42 billion in Q1, data published for the first time by the Monetary Authority of Singapore (MAS) yesterday shows.

That's based on the loan limits granted by banks; the amount drawn down on each loan could be less than the maximum limit granted.

A breakdown shows that new loans granted for owner-occupied property fell more than loans for investment property. New housing loans granted for owner-occupied property in Q2 slid 5.3 per cent to $9.29 billion, compared to $9.81 billion in Q1, while housing loans for investment property declined by 1.3 per cent to $3.57 billion, from $3.61 billion in Q1.

The volume of outstanding housing loans granted for owner-occupied property, based on loan limits granted, rose to $101.64 billion in Q2, up 4.5 per cent from $97.28 billion in Q1. The change in the volume of outstanding loans would reflect new housing loans granted during Q2, as well as repayments made on existing loans during the quarter.

Outstanding loans for investment property rose 5.3 per cent to $45.21 billion, from $42.94 billion in Q1.

Overall, the average loan-to-value (LTV) ratio for housing loans across the industry was slightly higher in Q2, at 44.3 per cent, compared to 44.1 per cent in Q1. The industry-wide LTV average was calculated based on a survey by MAS of housing loans for selected financial institutions, which account for over 90 per cent of total outstanding housing loans made by the industry. The average LTV ratio for the industry was computed by weighting each financial institution's LTV ratio by the amount of outstanding loans granted by that financial institution, MAS said. The LTV ratio estimate for Q2 is based on May data, it added.

The industry non-performing loan ratio for housing and bridging loans was 0.4 per cent in both Q1 and Q2.

Applications for new home loans fell sharply after the government introduced progressively stricter measures to curb speculation in the residential property market late last year and early this year.