Singapore's rocketing household debt spooks analysts

It's outpacing household assets.

Standard Chartered said in a repor that Singapore's household debt has also been rising at a faster pace than household assets since Q2-2011, according to the Singapore Department of Statistics.

While this is relatively high, the amount of equity that households have in the housing market (which accounts for just under three-quarters of Singapore's total household debt) has been increasing since the introduction of strong macro-prudential measures.

Here's more from Standard Chartered:

Also, the average loan-to-value (LTV) ratio for housing loans was only 47.3% as of Q3-2013. The share of loans with LTV ratios above 70% fell to 26% as of Q3-2013 from 35% in Q3-2009. More recent data has also shown a slower pace of housing-loan growth, down to 8.6% y/y, versus an average 13.9% in 2013. However, the sensitivity to higher interest rates is an issue.

The Monetary Authority of Singapore (MAS) has said that a 3ppt increase in mortgage rates could increase the share of over-leveraged households to 10-15%.

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