Page 1 of 4 1234 LastLast
Results 1 to 30 of 97

Thread: Most over-stretched borrowers affluent, unlikely to default: MAS

  1. #1
    Join Date
    Mar 2012
    Posts
    7,827

    Default Most over-stretched borrowers affluent, unlikely to default: MAS

    Market must be very confused by now

    Singaporean households are overall in good financial shape and even those who may have over-stretched themselves are unlikely to default on their loans even when interest rates rise.
    Mr Lawrence Wong, a director on the board of the Monetary Authority of Singapore, reiterated in Parliament on Monday that only 5 to 10 per cent of property loan borrowers here are servicing debts amounting to over 60 per cent of their monthly incomes.
    Housing loans constitute the bulk of their debt, he said.
    "But it doesn't mean they will automatically default on their loans. Most of these borrowers have above-average income levels. The majority took up private housing loans and are only servicing one housing loan, so they are likely to have a larger absolute buffer in income and assets."
    Mr Wong was speaking on behalf of MAS chairman and Deputy Prime Minister Tharman Shanmugaratnam, in response to a question raised by Nominated MP Laurence Lien.
    Mr Wong added that household balance sheets are on the whole in good shape, with the household debt to income ratio falling in the second half of the last decade.
    The debt-to-income ratio of 2.1 times last year was still "significantly lower" than the 2.6 times seen in the middle of the last decade, he added, which means that Singaporean households "are not more leveraged than they have been in the last decade".
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  2. #2
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    since those who have over-stretched themselves are unlikely to default on their loans, I suppose he meant the 5-10% r sensible & mature adults who noes what they r doing.
    so effectively there is no nid for CM7A - 60% TDSR rite?

  3. #3
    Join Date
    Apr 2012
    Posts
    1,295

    Default

    Seems like u are the only one who is confused...those with lots of loans are deems to be over stretched. Why?

    Take a million loan for 1% and then use their existing 1 mil cash for other vehicle that can yield 4% for eg....like that of course better right? Better management of opportunity cost! So, u still confuse?? Hahaha....sorry...just my opinion.

  4. #4
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    Quote Originally Posted by lajia
    Seems like u are the only one who is confused...those with lots of loans are deems to be over stretched. Why?

    Take a million loan for 1% and then use their existing 1 mil cash for other vehicle that can yield 4% for eg....like that of course better right? Better management of opportunity cost! So, u still confuse?? Hahaha....sorry...just my opinion.
    precisely. My fixed deposit rate of 1.45%-1.6% is better den my loan rate of around 1.3%, who is so stupid to go and loan the minimum so as to let MAS pat u on the head and say "well done"?

  5. #5
    Join Date
    Mar 2012
    Posts
    7,827

    Default

    Quote Originally Posted by mermaid
    since those who have over-stretched themselves are unlikely to default on their loans, I suppose he meant the 5-10% r sensible & mature adults who noes what they r doing.
    so effectively there is no nid for CM7A - 60% TDSR rite?
    Not sure what was his exact word, but this sort of contradict what Tharman said earlier.

    "our rough assessment is that five to ten percent (of borrowers) are at risk of having over-leveraged, bearing in mind that interest rates are going to rise, and you can't say for sure what the economy will be like, what unemployment will be like, a few years down the road."

    Honestly if they think there is no risk of default, then why comment about the risk in the first place.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  6. #6
    Join Date
    Dec 2011
    Posts
    1,763

    Default

    Only rich people dare to over stretched their loan. Most middle class people like to play safe. Rich people hate to see money sitting in the bank being unproductive. Middle class people love to see money in the bank as a source of security and comfort.

  7. #7
    Join Date
    Mar 2012
    Posts
    7,827

    Default

    Quote Originally Posted by lajia
    Seems like u are the only one who is confused...those with lots of loans are deems to be over stretched. Why?

    Take a million loan for 1% and then use their existing 1 mil cash for other vehicle that can yield 4% for eg....like that of course better right? Better management of opportunity cost! So, u still confuse?? Hahaha....sorry...just my opinion.

    theoretically it all sound good, but the question will always be how long can you continue to borrow at 1% and make 4% return with your cash.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  8. #8
    Join Date
    Aug 2011
    Posts
    412

    Cool

    Quote Originally Posted by Ringo33
    theoretically it all sound good, but the question will always be how long can you continue to borrow at 1% and make 4% return with your cash.
    By then, u should pay back the loan or fixed the rate.
    De-leverage.

  9. #9
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    Quote Originally Posted by Ringo33
    Not sure what was his exact word, but this sort of contradict what Tharman said earlier.

    "our rough assessment is that five to ten percent (of borrowers) are at risk of having over-leveraged, bearing in mind that interest rates are going to rise, and you can't say for sure what the economy will be like, what unemployment will be like, a few years down the road."

    Honestly if they think there is no risk of default, then why comment about the risk in the first place.
    it is contradictory.
    when he 1st spoke tat the 5-10% who over-leverage is worrying, I felt tat stmt to be too shallow. He din even bother to check the background of the 5-10% b4 making such a conclusion. Now ask another person to comment the exact opposite. reflect very badly on mas.


    Quote Originally Posted by indomie
    Only rich people dare to over stretched their loan. Most middle class people like to play safe. Rich people hate to see money sitting in the bank being unproductive. Middle class people love to see money in the bank as a source of security and comfort.
    now Im confused. I dare to over stretched my loan cos I prefer to see my money in the bank as a source of security and comfort. so I belong to which category?

  10. #10
    Join Date
    Aug 2011
    Posts
    412

    Cool

    Quote Originally Posted by mermaid
    it is contradictory.
    when he 1st spoke tat the 5-10% who over-leverage is worrying, I felt tat stmt to be too shallow. He din even bother to check the background of the 5-10% b4 making such a conclusion. Now ask another person to comment the exact opposite. reflect very badly on mas.




    now Im confused. I dare to over stretched my loan cos I prefer to see my money in the bank as a source of security and comfort. so I belong to which category?
    If u can convince, then u confuse.

  11. #11
    Join Date
    Dec 2011
    Posts
    1,763

    Default

    The headline should read "5-10% multimillioners who over stretched in their borrowing is making more money while they sleep, than most of us in our working hours"

  12. #12
    Join Date
    Apr 2012
    Posts
    1,295

    Default

    No matter what situations, there will be ppl who get richer and ppl who get poorer...that also depend largely on how you manage the situation to your advantage! This one nobody can teach... good luck.

    Quote Originally Posted by Ringo33
    theoretically it all sound good, but the question will always be how long can you continue to borrow at 1% and make 4% return with your cash.

  13. #13
    Join Date
    Apr 2012
    Posts
    1,295

    Default

    Haha...this one correct la...money scare cold la, so when they have more money, they will attract even more!

    Quote Originally Posted by indomie
    The headline should read "5-10% multimillioners who over stretched in their borrowing is making more money while they sleep, than most of us in our working hours"

  14. #14
    Join Date
    Aug 2011
    Posts
    412

    Cool

    Quote Originally Posted by lajia
    No matter what situations, there will be ppl who get richer and ppl who get poorer...that also depend largely on how you manage the situation to your advantage! This one nobody can teach... good luck.
    Borrowing at 1%, once in a lifetime opportunity??

  15. #15
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    Quote Originally Posted by indomie
    The headline should read "5-10% multimillioners who over stretched in their borrowing is making more money while they sleep, than most of us in our working hours"
    hahaha, den shouldn't the heading be" 5-10% multi-millionaires who over-stretched their borrowings are making more money in their sleep than those who under-stretched"

  16. #16
    Join Date
    Jun 2009
    Posts
    2,309

    Default

    They should roll back part of the TDSR CM.

    Just target those parents who buy for their children and include co-borrows to be treated as owners when it comes to stamp duty payment.

    This means that if you cannot afford PC on your own and need others to come in to help you, you have to be taxed as if you are the others also.

    DKSG

  17. #17
    Join Date
    Nov 2008
    Posts
    2,438

    Default

    Over leverage is just an excuse to implement 60% MSR or 50% LTV.

    Last time 2003 to 2006, also a lot of buyers commit above 60%.

    Failed logic.

  18. #18
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    Quote Originally Posted by thomastansb
    Over leverage is just an excuse to implement 60% MSR or 50% LTV.

    Last time 2003 to 2006, also a lot of buyers commit above 60%.

    Failed logic.

    so u got any superb idea to counter-attack their failed logic bo?

  19. #19
    Join Date
    Jul 2009
    Posts
    7,482

    Default

    so if they are unlikepy to default means the market is still in good shape then.

  20. #20
    Join Date
    Jun 2007
    Location
    D15
    Posts
    5,095

    Default

    Now you know why I have to unload liao bo ?

    Read the title again : "AFFLUENT".

  21. #21
    Join Date
    Jun 2007
    Location
    D15
    Posts
    5,095

    Default

    Quote Originally Posted by kane
    so if they are unlikepy to default means the market is still in good shape then.
    That is because we already unloaded liao.

    Good Luck.

  22. #22
    Join Date
    Jul 2009
    Posts
    7,482

    Default

    good luck to everyone lah.

  23. #23
    Join Date
    Jan 2011
    Posts
    1,620

    Default

    It's sad that we don't have a strong leader. It's all bits and pieces from different mouths.
    Yee ha! Did I tickle your funny bone?


  24. #24
    Join Date
    Jan 2011
    Posts
    1,620

    Default

    Quote Originally Posted by blackjack21trader
    That is because we already unloaded liao.

    Good Luck.
    True. Now it's like in a cinema. Are you an audience?
    Yee ha! Did I tickle your funny bone?


  25. #25
    teddybear's Avatar
    teddybear is offline Global recession is coming....
    Join Date
    Mar 2009
    Posts
    10,800

    Default

    How can same thing have 2 opposite right answer?
    who is telling the right thing?

    Quote Originally Posted by ecimbew
    It's sad that we don't have a strong leader. It's all bits and pieces from different mouths.

  26. #26
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Beijing resident built rock villa on top of apartment ... afluent boh??



    anyway both car loan restriction and TDSR is just a way to "restrict credit growth" ... expect M2/M3 growth to go below 9% this year
    Ride at your own risk !!!

  27. #27
    Join Date
    Jan 2013
    Posts
    44

    Default

    Quote Originally Posted by mermaid
    precisely. My fixed deposit rate of 1.45%-1.6% is better den my loan rate of around 1.3%, who is so stupid to go and loan the minimum so as to let MAS pat u on the head and say "well done"?
    Mind sharing which bank gives such good fd rates and min amount?

  28. #28
    Join Date
    Nov 2008
    Posts
    2,438

    Default

    This one really cmi. I see liao also disappointed....



    Quote Originally Posted by teddybear
    How can same thing have 2 opposite right answer?
    who is telling the right thing?

  29. #29
    Join Date
    Mar 2013
    Posts
    1,835

    Default

    Quote Originally Posted by Superstar1
    Mind sharing which bank gives such good fd rates and min amount?
    it is maybank. but do note such high rates is for a tenure of 36mths. Min amt not so sure. U go maybank website to see.

  30. #30
    Join Date
    May 2013
    Posts
    218

    Default

    Quote Originally Posted by lajia
    Seems like u are the only one who is confused...those with lots of loans are deems to be over stretched. Why?

    Take a million loan for 1% and then use their existing 1 mil cash for other vehicle that can yield 4% for eg....like that of course better right? Better management of opportunity cost! So, u still confuse?? Hahaha....sorry...just my opinion.
    Care to share is this the 5-10% people over-leverage:-


    Couple age oldest at 42years old, one kid

    Owns HDB 4A w outstanding loan ($28k - will fully paid 2H2016)

    Owns a PC 2-bedder w outstanding loan ($450k) max out till age 70; at monthly mortgage of $1400 at current, fully rented at $2600

    Owns another $1.12mil PC 3-bedder under 40/60 LTV of loan (~$680k under CM6) - TOP 2H2016; paid up 1st 20%, next 20% in 3years

    Household income $60k per annum - no CPF/bonus as self-employed

    Savings/Investment:- $25k (savings)/ $300k in REITS return of ~7-8%

    No car.


    Any honest comments?

Similar Threads

  1. More homes put up for fire sale as borrowers default
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 17-12-14, 12:34
  2. TDSR tweak a lifeline for stretched owners: analysts
    By reporter2 in forum Finance and Legal
    Replies: 1
    -: 17-02-14, 20:10
  3. Overstretched borrowers unlikely to default: Minister
    By reporter2 in forum Finance and Legal
    Replies: 0
    -: 19-08-13, 15:47
  4. Affluent and flaunting it
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 27-04-07, 08:04
  5. Property stock values may be stretched
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 13-02-07, 15:03

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •