(July 30): Singapore’s newly buoyant housing market is proving a boon for its biggest bank.
DBS Group Holdings nominated mortgage lending as a bright spot when releasing second-quarter earnings on Monday.
Chief Executive Officer Piyush Gupta said that after three quarters of subdued growth -- ushered in by housing curbs introduced in July last year -- “we’ve seen the bookings come back up.”
Gupta said second-quarter mortgage-loan applications were up 60% from the first three months of the year and “since bookings are up, you’ll see the flow through to the balance sheet” in the second half.
Residential home prices in Singapore jumped 1.5% in the three months through June 30, data last week showed, the steepest gain since the second quarter of 2018. Luxury purchases spurred much of the rise, and there was a strong increase in private apartment purchases by foreign buyers.
Despite the recent up-tick, the effect of last year’s cooling measures is still being felt.
Gupta estimated DBS’s mortgage book would grow by about $1 billion in the second half, resulting in projected growth for 2019 of about $2 billion. That compares with a forecast of around $4 billion made at the start of 2018.
Admittedly, that’s “much slower than it used to be, but it’ll still be positive,” he said.
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