Why Singapore banks have no escape from housing loans slowdown

8 sets of housing curbs took a bite.

According to UOB Kay Hian, Singapore's loan growth for building & construction and housing loans has slowed after a series of eight sets of cooling measures to tame the private residential property market.

Here's more:

Growth in loans for building & construction slowed from the recent high of 27.9% in Jan 12 to 19.2% in Sep 13. The fluctuation in loans to building & construction was previously more volatile as demand during the last cycle, which peaked in 2008, was inflated by the deferred payment scheme.

Loan growth for building & construction is expected to be stable at about 20% due to the government’s policy of increasing supply through government land sales (GLS).

Similarly, growth in housing loans moderated from the recent high of 23.4% in Aug 10 to 12.9% in Sep 13. Growth from housing loans is sustainable in 2013 due to progressive drawdown for the huge volume of private residential units previously sold in 2010 and 2011.

We expect housing loans to maintain low double-digit expansion in 2H13 and moderate more significantly starting 2H14.