Total bank lending in Singapore rose 17.3 per cent in February to S$334 billion from a year earlier, data released by the Monetary Authority of Singapore showed.
Month-on-month lending rose 1.6 per cent – lower than the 1.8 per cent rise in January.
Higher housing loans to consumers were among the big contributors to last month’s rise in total bank lending. But analysts expect this segment to slow down in the coming months as the recent cooling measures take effect on the property market.
Although housing and bridge loans increased 23 percent on-year, it showed a less than 1 per cent increase from the previous month, signalling the start of a gradual slowdown for housing demand, analysts said.
“We are seeing a steady plateauing in the number. There could be some downside going forward but this is pretty much in line with the government’s objective to cool the property market,” Mr Irvin Seah, vice-president and economist at DBS Group Research, said.
“In fact it is a very clear reflection that the measures has gradually taken effect and at the end of the day we have to be clear that measures are not there to engineer a correction in the market. In fact they are there to cool things down a little bit to ensure the property prices will be sustainable in the longer term,” he added.
Meanwhile, manufacturing loans grew 6 per cent on-year and lending to building and construction sector rose 13 per cent.
Car loans were the only segment under consumer loans that showed a dip in February. It fell 3.9 per cent to S$11.6 billion from a year ago and recorded a 0.6-per-cent decline from the previous month.
The higher cost of driving a car was blamed for the drop.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said: “The drop in car financing is probably a reflection more in the demand and supply situation in the COEs and concerns in the higher oil prices.”
Source : Today – 1 Apr 2011