SINGAPORE - Household liabilities grew 1 per cent in the fourth quarter of 2023 from the same period a year ago, reversing three quarters of year-on-year declines, as households took on more mortgage and personal debt.
On a quarter-on-quarter basis, liabilities for the average household also grew at the fastest pace since the second quarter of 2022, rising 0.8 per cent from the third quarter to $364.2 billion, data from the Department of Statistics (SingStat) on Feb 26 showed.
Mortgage loans and personal loans, such as car loans, credit card debts and renovation loans, count as household liabilities.
Despite the uptick in household debt, the average household remains financially healthy in the fourth quarter.
Household net worth, which is a measure of how much a household has left after paying off all its borrowings, grew by 8.9 per cent year on year, and 3.1 per cent quarter on quarter, to $2,804.6 billion.
A growing household net worth means the average household has more assets than liabilities, giving it a safety buffer against unexpected emergencies. Household assets include financial assets like savings and share investments, and residential property.
In the fourth quarter, household assets grew by 8 per cent year on year, and 2.8 per cent quarter on quarter, to $3,168.8 billion.
A separate quarterly report from Credit Bureau Singapore, the CBS Consumer Credit Index, provided details of the consumer credit behaviour for loans across the different age groups.
The report showed that those aged 21 to 29 took on increasing amounts of home and motor vehicle debt.
The average home loan balances for this age group rose to $439,650 in the fourth quarter, an increase of 3.8 per cent from the previous quarter.
They also registered the biggest increase in average car loan balances to $47,034.
Their delinquency and default rates, however, remain manageable – delinquency rate was an average 0.15 per cent for home loans and 0.4 per cent for car loans, and the default rate was zero.
A loan is delinquent when a borrower is more than 30 days late in making repayments, and it is in default when a lender writes off the loan amount as being uncollectible from the debtor.
As for unsecured credit card debt, the CBS report showed that those in their mid- to late 30s had the biggest increase in credit card balances in the fourth quarter.
Their average unsecured credit card balances rose 7.05 per cent quarter on quarter, to $5,614.
Their average delinquency rate went up slightly to 3.48 per cent while their average default rate edged up to 0.11 per cent.
Personal disposable income, another indicator of financial well-being, rose 4.9 per cent in the fourth quarter from the same period last year to $85.4 billion.
This is the second consecutive quarter of slower year-on-year growth in personal disposable income.
SingStat said the moderation is due to weaker growth of compensation of employees.
It noted that personal disposable income refers to the maximum amount that one can spend on the consumption of goods and services, without having to liquidate their financial or non-financial assets, or take on more debt.
