UBS flags rapid rise of S'pore household debt

[Staff69]

 

ok i shown hand , waiting for crash

[CH_CO]

Well , debt levels are high , very simple one lah , how many here can claim he bought his car/property via cash? Out 10 maybe u find 1 or 2. The rest would fall into those in debt. With the prices of property at unreasonable amounts , it is just a matter of time . Imagine an EC can easily fetch you a 1+ million and over if you are in the penthouse even if you are at ulu places like pasir ris. I am not sure if i can find as many to be able to earn 15k and above every month on average to be able to afford those million dollar houses with money to spare.

 

Not to mention the high amounts of debt due to credit cards and loose credit given by the bank , i even had sale personals calling me for loans and stuff and i am pretty sure many have some debt here and there. As the market slows , there are bound to be many unable to furfil their debt obligations and these are the people which will increase our Debt to gdp .

Edited June 26, 2013 by CH_CO

[JaneF]

You tell me who in this country (besides the sibeh rich ones) no debt one? The entire system is designed to put you in debt so it enslaves you to the gahmen...

[Taipan49]

You tell me who in this country (besides the sibeh rich ones) no debt one? The entire system is designed to put you in debt so it enslaves you to the gahmen...

 

Me!

[Enye]

You tell me who in this country (besides the sibeh rich ones) no debt one? The entire system is designed to put you in debt so it enslaves you to the gahmen...

 

your question shows that you are not familiar with MCF

 

[Evillusion]

You tell me who in this country (besides the sibeh rich ones) no debt one? The entire system is designed to put you in debt so it enslaves you to the gahmen...

Me in five yrs time...

[Staff69]

in 40 years time, i confim no debt cos i be dead

[Felipe]

tats y need 6.9mil.

 

anyway, we have the highest public debt, or nearly the highest, in the world

[Sabian]

The sexpert in 2009 say everyone will die .......I know everyone will die , one day ......when

 

Nb.... talk like will happen the next week. Next week come all hide inside cave ...cb

Keep on saying the same thing, 1 day sure tio beh pio one mah...no?

 

Broken rolex also tell the right time twice in a day...

[Sdxx]

You tell me who in this country (besides the sibeh rich ones) no debt one? The entire system is designed to put you in debt so it enslaves you to the gahmen...

 

Car loan interest 1.88% so I decided to take loan and put my money elsewhere. One example is SRS, just received tax returns, save a lot of money on taxes. Thks gahmen for the scheme and not enslaves to them.

[Latio2005A]

Got Tony Tan no scare!

 

But since the haze started, I can't locate him. He went MIA.

[Ooosh]

Well , debt levels are high , very simple one lah , how many here can claim he bought his car/property via cash? Out 10 maybe u find 1 or 2. The rest would fall into those in debt. With the prices of property at unreasonable amounts , it is just a matter of time . Imagine an EC can easily fetch you a 1+ million and over if you are in the penthouse even if you are at ulu places like pasir ris. I am not sure if i can find as many to be able to earn 15k and above every month on average to be able to afford those million dollar houses with money to spare.

 

Not to mention the high amounts of debt due to credit cards and loose credit given by the bank , i even had sale personals calling me for loans and stuff and i am pretty sure many have some debt here and there. As the market slows , there are bound to be many unable to furfil their debt obligations and these are the people which will increase our Debt to gdp .

 

Enjoy now pay later....everyone is in debt just that how big or small....

Big debts are those dabbling in property, business, investments...

Those with no debt are probably not married, no cars, no house

 

Best is to only have one credit card as it is easy to spend but difficult to pay back....

Edited June 26, 2013 by Ooosh

[Zniper]

Every time tis type of reports come out, it will only make sinkies more scare and thus making them throw stocks on hand heavily and cause a crash in the market for a while... So they expecting us to do tis from the report tis time?

[Kiadaw]

To be fair, being in debt is not unique to Singapore. Although things like Housing & Cars are very expensive in Singapore, comparatively, but in other countries, on top of much higher taxes, people tends to buy more or bigger stuff.

 

For instance, cars are dead cheap in US of A, but they tends to spend money buy higher spec/end cars, & they buy a few. Also they may spend a lot of money on their house, add this & that that can cost a lot. I know someone who have a swimming pool with beer taps.

 

In Germany, the price of a typical 4-5 room HDB, you can get a a proper well insulated, quality house with garage & garden (out of the main cities). Guess what, they buy these houses (instead of cheap apartment), so they are same debt level as Sinagpore (give or take). 30 years loans are also not unusual. In Germany, its not uncommon for people to buy 'Fair weather cars, bikes, quadbikes etc' that only to be used in warmer weather, which is maybe 4 months of the year.

 

But to be fair again, same debt level, but what you get for the money is different! But there are plus points in Singapore, being considerablely safe, accessible (do not have to travel far for anything), as well as all year summer (if you like warm weather), & cheap

domestic helpers.

 

But then again, you can say people in debt in other nation are often by lifestyle choice, but we can certainly spend less on otehr things, & Singaporeans, as well as many east Asia, are known to be big spenders of branded goods, clotehs & gadgets.

Edited June 26, 2013 by Kiadaw

[Somewhat1975]

uh oh.... i/r going up anytime soon?

 

High debt-GDP ratio could hurt in face of global slowdown

Bylivia yap

 

THE rapid rise in household debt here, coming amid the uncertainty of global financial markets, has been red-flagged.

 

Kelvin Tay, the regional chief investment officer for the Southern Asia-Pacific for UBS Wealth Management, said the high household debt levels, coupled with high property prices, could make Singapore vulnerable to a rise in unemployment, a reduction in incomes and asset deflation if a slowdown in global economic markets happens.

 

Singapore's household debt - total consumer loans of Domestic Banking Units - stood at 279 per cent of the total gross domestic product in the first quarter of this year, up from 177 per cent in the corresponding quarter in 2007.

 

The 279 per cent figure is even higher than the 198 per cent recorded in the first quarter of 2009, after the 2008 financial crisis.

 

Mr Tay said 80 per cent of household debt here is made up of mortgages, which, coupled with the climb in property prices since 2009, explains why household debt as a percentage of GDP shot up so sharply from 2007.

 

He said: "With (household debt) at such significant levels, it will be difficult for the government or policy makers to stimulate demand to offset the sluggish exports we are currently experiencing."

 

This has been worsened by panic selling of risk assets, such as US high yield and Asian local currency bonds, since the US Federal Reserve's indication last week that it might start tapering its bond-buying programme later this year.

 

Mr Tay said a rise in US treasury yields usually leads to a rise in Singapore government bond yields. As the USD is a major component in the basket of currencies used to manage the SGD, interest rates here usually follow the trends of USD interest rates.

 

"Given the sharp rise in credit growth over the last few years, I would not be surprised if an increase in interest rates is followed by deterioration in the loans portfolio of banks and other financial institutions; this would in turn lead to a tightening of credit supply and a higher cost of financing for credit in general."

 

He still believes the Asian market will continue growing, despite the impending halt of liquidity from the Fed. He rejects the notion that this could lead to a repeat of the Asian financial crisis "because the circumstances of both the global economy and, more importantly, the Asian economies, are now very different from 1994".

 

Mr Tay said the Asian economies, excluding Japan, have strong fundamentals, with total foreign exchange reserves comprising more than half the world's GDP (52 per cent), much higher than in 1994 (23.6 per cent). Corporate balance sheets are similarly healthy, and although the net debt-to-equity ratio increased to 26.1 per cent from 18.3 per cent after the Lehman Brothers' crisis in 2008, this is still well below the 41.8 per cent in 1994, when the Fed began to raise interest rates.

 

Despite a relatively sharp rise in debt over the past few years, the gross debt-to-GDP ratio for Asian economies excluding Japan averaged 46.4 per cent, with GDP growth for this year and the next likely to average 6.3 per cent. This is well above the 3 per cent growth rate for the world.

 

Mr Tay said: "In short, the Asian story not only remains intact, but is also more attractively valued than before.

 

"Compared to the years just before the Asian financial crisis, Asia excluding Japan has significantly more FX reserves, lower net debt-to-equity levels and sovereign debt levels and healthy growth rates."

 

 

pretty amateur piece of work. To gauge the financial well being of of the household, the important thing to look at is net worth, aka asset minus debt. Yes, Singapore household debt has been increased a lot to S$200 billion. But, Singapore household has an asset of 1.4 trillion. Debt to asset ratio has been pretty stable over past 10 years at 16%.

 

 

[Enye]

pretty amateur piece of work. To gauge the financial well being of of the household, the important thing to look at is net worth, aka asset minus debt. Yes, Singapore household debt has been increased a lot to S$200 billion. But, Singapore household has an asset of 1.4 trillion. Debt to asset ratio has been pretty stable over past 10 years at 16%.

 

in a recession, your asset value drops like a rock

 

so what happens to your debt to asset ratio?

 

and banks only look at your debt repayment ability.

 

if your asset value drops lower than your debt

 

you are in trouble.

[Somewhat1975]

in a recession, your asset value drops like a rock

 

so what happens to your debt to asset ratio?

 

and banks only look at your debt repayment ability.

 

if your asset value drops lower than your debt

 

you are in trouble.

even when the house price drop by half, debt to asset ratio will be 20%.

[Throttle2]

Well , debt levels are high , very simple one lah , how many here can claim he bought his car/property via cash? Out 10 maybe u find 1 or 2. The rest would fall into those in debt. With the prices of property at unreasonable amounts , it is just a matter of time . Imagine an EC can easily fetch you a 1+ million and over if you are in the penthouse even if you are at ulu places like pasir ris. I am not sure if i can find as many to be able to earn 15k and above every month on average to be able to afford those million dollar houses with money to spare.

 

Not to mention the high amounts of debt due to credit cards and loose credit given by the bank , i even had sale personals calling me for loans and stuff and i am pretty sure many have some debt here and there. As the market slows , there are bound to be many unable to furfil their debt obligations and these are the people which will increase our Debt to gdp .

 

Probably out of 100 maybe 1 or 2, mate , not out of 10.