SINGAPORE: The Monetary Authority of Singapore (MAS) has revealed in its latest Financial Stability Review that local households have experienced significant financial growth despite an increase in overall debt levels over the past year.
According to the report, household debt rose by 3.6% in the third quarter of 2024 compared to the same period last year. However, this increase was outpaced by an 8% growth in financial assets, driven by robust income growth that exceeded the accumulation of debt.
Housing loans accounted for three-quarters of total household debt, reflecting the continued significance of property financing within household financial commitments. Despite this, the MAS noted that Singaporean households remain in a strong financial position, with liquid assets such as cash and deposits exceeding total liabilities.
The report also highlighted that household net wealth grew by approximately 9% year-on-year in the first half of 2024, reaching nearly SGD 3 trillion as of the third quarter. This growth underpins the financial resilience of Singaporean households, supported by a combination of rising incomes and prudent financial management.
Another positive trend identified in the report is the steady decline in the ratio of total household debt to personal disposable income. As of the third quarter, this ratio stood at 1.1 times, falling below the 15-year average.
This marks a continuation of a downward trend since the fourth quarter of 2021, signaling a healthier balance between debt and income among local households.
Featured image by DepositPhotos