Home sales up in S'pore but Moody's wary
SINGAPORE'S private-home sales last month rose for a second month to the highest since a March record, even as Moody's Investors Service cut its outlook for the country's banking system on concern that borrowing costs may climb.
Private-home sales rose 24 per cent to 1,806 units last month from a revised 1,459 units in May, the Urban Redevelopment Authority said on its website yesterday, the highest since 2,793 units were sold in March.
But Moody's said the "rapid" loan growth and rising property prices in the country add more risk to credit quality.
Record home prices amid low interest rates raised concerns of a housing bubble and prompted the Government to widen a four-year campaign in January to curb prices in Asia's second-most-expensive housing market.
"The operating environment for Singapore's banking system has been favourable for an extended period, with low interest rates and strong economic growth domestically and in the surrounding region," Mr Gene Fang, a Moody's senior analyst, said in a statement yesterday.
"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."