2 reasons behind Singapore banks' steady mortgage loans growth

Still buoyant amidst cooling measures.

According to Credit Suisse, despite several rounds of property market cooling measures employed by the Singapore government, the growth in outstanding overall mortgage loan continues to be steady for Singapore banks led by two drivers: (1) The growth in outstanding loans is being driven by drawdown on mortgage loans booked earlier (driven by record primary market sales), and (2) Some of the slowdown in Singapore mortgages is being compensated by a more aggressive approach to mortgages in regional markets (except DBS).

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But as the primary and secondary market transaction volumes in Singapore continue to slow, the pace of mortgage loan growth is bound to slow in 2014. The charts below illustrate the lag effect between property transaction volumes and loan growth.