BUCKING the regional trend, household liability as a percentage of household income fell between 2000 and 2007 in Singapore.

Citing figures from CEIC, the MasterCard Worldwide Index of Consumer Purchasing Priorities report notes that only Singapore and Japan saw declines of 7 and 8 per cent respectively.

Singapore fell from 157.3 per cent in 2000 to 145.6 per cent in 2007 while Japan fell from 99.2 per cent to 91.5 per cent over the same period.

Household liability mostly comprises mortgages and MasterCard Worldwide (Asia/Pacific) economic advisor Yuwa Hedrick-Wong said that between 2000-2007, people in Singapore and Japan have been concerned with paying off debts from previous downturns and 'rebuilding their savings'.

Dr Hedrick-Wong also said that Singapore had not seen the same 'rapid expansion' in homeownership as compared to other countries. 'The boom in the property market here was mostly restricted to the high-end segment,' he added.

CEIC data also revealed that Indonesia, Korea and Australia saw household liability as a percentage of household income rise by 132, 68 and 65 per cent respectively.

More marginal increases were seen in Hong Kong, Taiwan, India and Malaysia with increases of 4, 16, 18 and 18 per cent respectively.

While Dr Hedrick-Wong said that the figures suggest that the risk of defaults on mortgages is lower in Singapore, he added: 'This does not mean that people are ready to take on more debt.'

Indeed, Singaporeans could just still be licking their wounds from the previous downturn. MasterCard's survey revealed that in 2000, Singapore's household liability as a percentage of household income was the highest among the same Asia-Pacific countries surveyed at 157.3 per cent followed by India (110 per cent) and New Zealand (106 per cent).

Not surprisingly then, in 2007, Singapore still ranks among the countries with the highest household liabilities after New Zealand (161.3 per cent), Australia (158.7 per cent), and Korea (158 per cent).

The MasterCard findings are based on a survey of 6,019 consumers in 14 countries conducted between September 1-29.

Of the 14 countries surveyed, Singapore ranked sixth in terms of saving to buy property with 34.2 per cent of respondents citing this as a reason for saving. About 62 per cent said they would save for retirement with around 26 per cent saying they would save for investment.

Precautionary saving in Singapore - defined as saving during times of uncertainty - is also among the highest in Asia with 75.4 per cent of respondents likely to save for a rainy day. The survey found that in Singapore, 21 per cent of the respondents expect to save more than 30 per cent of their own income in the next 12 months.

This article was first published in The Business Times on December 11, 2008.