DBS Housing Loans Not Affected by Softer Property Market

DBS CEO was asked why DBS's loan book was not displaying pressure from a softening property market when UOB revealed that its Non-Performing Loan had climbed as payments by some high-end property buyers deteriorated.

Mr Gupta elaborated that DBS's quantum of financing for property loans is determined by the client's debt burden ratio and repayment capability based on an interest rate of 3.5 percent.   DBS sees no stress in housing loans.

MAS Comments
On the issue of property curbs, Mr Menon (MD of MAS) pointed out that while property prices have jumped 60% over the past 4 years, they have fallen by merely 3.3% over the last 3 quarters.

So, it was not time yet to lift the tightening measures aimed at stabilising the market.

Mr Gupta opined that property prices could drift down a further 5-7 percent over the next few quarters.

DBS went on to say that they do not see a big issue, even if prices fall 30%.

Happy investing!