Just shows all the unhappiness in Singapore.
Domestically, household debt increased to 77.2% of GDP as of March 2013 from 64.4% at end-2007.
For the same time period, prices for private property grew 1.2 times and prices for Housing Development Board (HDB) real estate 1.7 times. Regionally, we observe similar or even more dramatic trends.
With the potential risk of a turn in the interest rate cycle, we view strong asset inflation and credit growth trends as vulnerabilities, as this combination would likely cause credit costs to rise from their current low base. If interest rates rise, we therefore expect rising credit costs to outweigh any potential increases in lending margins.
While it is difficult to exactly predict turning points in banking credit cycles, the increased likelihood of tightening of US monetary policy - with a higher probability of a tapering of quantitative easing during our outlook period - is a potential trigger. There will be effects for interest rates in Singapore and the surrounding region, as well as for capital flows in and out of the emerging markets where Singapore banks are active.