How sustainable is Singapore’s accelerating housing debt trajectory? Mortgage loans surged 5.2% year-on-year in the second quarter of 2025, reaching $284.3 billion, while total household liabilities expanded 6.1% during the same period. This marks seven consecutive quarters of expansion.
This sustained growth underscores mounting financial pressures within the residential property sector, prompting regulatory scrutiny and public concern regarding market stability. According to a National University of Singapore poll, market participants anticipate policy intervention, reflecting widespread expectations that authorities will introduce additional curbs to contain debt accumulation.
The burden of mortgage obligations has intensified measurably, with mortgage loans representing 80.3% of personal disposable income in Q2 2025, compared to 79.5% in the preceding quarter. Mortgage loans consistently constitute at least 70% of household liabilities since Q1 1999, demonstrating the dominance of residential borrowing within household balance sheets. The long-term average household debt to GDP stands at 52.87%, reflecting persistent structural patterns in Singapore’s household leverage. Historical data indicates that the all-time high ratio reached 96.0% in September 2003, underscoring the dramatic improvement in household debt sustainability over the past two decades.
Singapore’s household debt reached $278.8 billion USD in January 2025, with the ratio of household debt to GDP estimated at 53% by Maybank Kim Eng for Q2 2025, positioning the nation among countries with the highest debt ratios globally. Transaction volumes typically contract 20-40% after major policy implementations, as demonstrated by previous cooling measures introduced to moderate market activity.
Despite these escalating figures, structural safeguards and household financial resilience provide counterbalancing factors. Regulatory caps restrict mortgage servicing to 30% of gross monthly income for HDB and executive condominium loans, while total debt servicing is capped at 55%, establishing protective parameters against excessive leverage.
The liabilities-to-assets ratio remains historically low at approximately 11%, and liquid assets have consistently exceeded total liabilities since Q3 2006, furnishing a substantial buffer against financial distress. Household net worth increased 8.0% year-on-year in Q2 2025, reflecting asset accumulation that offsets liability expansion.
Analysts indicate no discernible signs of systemic financial stress notwithstanding rapid debt growth, attributing household sector resilience to liquidity availability and sustained asset appreciation, particularly in residential property valued at $439.9 billion.
Nevertheless, the government’s upgraded economic growth forecast to 1.5%–2.5% for 2025 and prevailing affordability strain suggest that policymakers remain attentive to housing market dynamics and potential vulnerabilities requiring preemptive regulatory intervention.
