SINGAPORE : The number of mortgagors defaulting on their property loans has reduced over the last two years, according to DP Credit Bureau (DPCB).
It said in a report that the average default rate across all age groups fell to a low 0.43 per cent in March 2010, down from the 0.89 per cent in March 2008.
DPCB general manager Lincoln Teo said this represents an improvement in the property market, leading to more positive sentiment which indirectly drives better payment behaviour.
The bureau also noted that while the proportion of loans in default is trending lower, there are variations across different age groups.
It said the percentage of 21 to 29 year olds defaulting on their mortgages has steadily fallen to 0.42 per cent, from 2.2 per cent two years ago.
Notably, it said the 50 to 59 year olds have overtaken the 21 to 29 year olds as the age bracket with the highest percentage of loans in arrears, with 0.62 per cent behind in their payments.
However, Mr Teo said while younger people are more consistent in meeting their mortgage obligations, they may not be handling other credit responsibly.
He also warned that with increasing property prices and bigger mortgages, this group may be shouldering a larger debt burden which may not be sustainable in the long run.
In addition, the bureau said that over time, there has been a shift towards younger borrowers, with the percentage of loans given to 21 to 29 year olds increasing, while for people over 50, the percentage of loans is declining.
Meanwhile, the report showed that 49.7 per cent of all mortgage defaults take place between the third and the fifth year of the loan, while 31 per cent take place after the fifth year.
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