HOME loans shot up in August at the fastest pace in over two years as more en bloc sellers bought existing properties and foreigners opted to buy instead of rent.
Home loans in August expanded 2.6 per cent compared to the previous month, and grew 10.7 per cent from the same period a year ago.
The 10.7 per cent rate is the fastest in 29 months. This is the first time in over two years that it has entered double-digit territory. July's growth figure was 8.1 per cent.
Bankers noted that one big factor driving mortgage growth was the growing number of borrowers, who having cashed in on en bloc deals, snapped up replacement properties, especially in the outskirts of the central part of Singapore.
This group of buyers signed for existing properties in April or May, then took up loans later in August.
One local banker noted that the average size of mortgages taken out in August dipped, possibly because some borrowers flush with cash from en bloc sales were taking out smaller loans or had downgraded to smaller homes.
Another group of borrowers were foreigners who had previously leased properties but were now opting to buy their own homes, given how high rentals have climbed.
Home loans, which make up about a third of banks' Singapore loans portfolio, also helped to power total bank lending to yet another month of double-digit growth.
Total lending for August reached 10.8 per cent compared to a year ago, as stronger mortgage and credit card growth offset a decline in building and construction loans.
Read the full report in today's edition of The Straits Times
