Singapore households balance rising debt with asset growth

[SINGAPORE] Singaporean households are experiencing rising debt levels, according to the latest figures from the Singapore Department of Statistics. In the first quarter of 2025, household liabilities increased by 5.2% year-on-year, reaching S$384.1 billion, marking the sixth consecutive quarter of growth. Much of this uptick stems from increased borrowing for property purchases and other significant expenditures.

However, this rise in debt doesn’t necessarily signal financial trouble. Many families are using long-term loans strategically to spread out the cost of big-ticket items like homes, which helps balance their day-to-day cash flow. In a city with high living costs, managing payments over time is often a rational approach to personal finance.

Importantly, household financial assets are growing even faster, jumping 7.5% year-on-year to approximately S$670.1 billion. This ensures that Singaporeans’ liquid assets comfortably cover their debts, keeping overall household net worth on an upward trajectory. With net worth rising 8.1% year-on-year to S$3.1 trillion, supported by resilient property values, experts suggest the overall picture remains one of financial strength, not vulnerability.

Implications

For businesses, particularly in real estate and financial services, the robust borrowing trend signals ongoing demand for housing and mortgages, suggesting the property market remains resilient. Banks and lenders can view the expanding mortgage portfolios as a sign of confidence but should stay alert for any shifts in repayment behavior.

For consumers, the balance between rising debt and rising assets underscores the importance of responsible financial planning. While borrowing can enhance purchasing power, it also places a premium on maintaining liquid reserves and keeping pace with loan obligations. A well-managed household balance sheet can provide both flexibility and security, especially during periods of economic uncertainty.

For public policy, these trends highlight the importance of continued regulatory vigilance. While the current debt levels appear sustainable, policymakers must ensure that lending standards remain tight, particularly as interest rates fluctuate. Safeguarding household financial health will require proactive monitoring to avoid future overextension in the housing sector.

What We Think

Singapore’s household debt narrative is not a cautionary tale—it’s a demonstration of calculated financial management. Rising liabilities backed by even stronger asset growth suggest that most households are leveraging debt wisely rather than recklessly. This dynamic reflects the maturity of Singapore’s financial landscape, where homeownership remains a central aspiration but is balanced by diligent savings and investment habits.

Still, the slowdown in net worth growth—from 8.5% to 8.1%—is worth watching, as it may hint at emerging pressures from inflation, market corrections, or changing consumer behavior. It will be crucial for both households and lenders to avoid complacency, even in a strong environment. Maintaining this balance will define Singapore’s financial stability moving forward, making it a space where caution and optimism must continue to coexist.