Why a property bubble in singapore is brewing
Let’s look at the ratio of new housing loans to new bank loans from period of Jan 2009 to May 2010.
Housing loans increased by about 18 billion while new bank loans increased by about 21 billlion. Thus the ratio is 0.85 (ie. 85% of new bank loans are made up of new housing loans)
Also,Housing loans has increased to about 34% of bank loans
This high dependence on housing loans to drive bank loans in singapore is unhealthy and speaks of a property bubble.
Those who have memories of 1997-98 crisis will know that a property bust is possible, thus be mentally prepared for one in coming years.
Entry filed under: Watch your step.