Parliamentary Replies
Published Date: 02 August 2022

Reply to Parliamentary Question on median debt-to-income ratio of Singaporeans and citizens living in top 10 cities by GDP




Date: For Parliament Sitting on 2 August 2022

Name and Constituency of Member of Parliament

Mr Shawn Huang Wei Zhong, MP, Jurong GRC


To ask the Prime Minister whether the Government is able to provide a comparative table of median debt-to-income ratio of Singaporeans and citizens living in the top 10 cities ranked by gross domestic product for the past three years.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. The debt-to-income ratio (DTI) of the household sector in Singapore averaged 1.3 for the period of 2018-2020. Compared with the top 10 advanced economies by Gross Domestic Product (GDP) per capita[footnote group="1"]Based on IMF World Economic Outlook Database (April 2022). The table shows the top 10 economies with the highest GDP per capita (USD) as at 2021.[/footnote], Singapore’s household DTI, with the exception of the United States, is the lowest (Table 1). 

2. More importantly, DTIs have to be viewed in context of a household’s assets. Households in Singapore have assets significantly larger than their debts on aggregate. Looking at assets net of liabilities, the net assets-to-income ratio in Singapore of 7.9 on average for the period of 2018-2020 is the highest among the same economies (Table 2). 

3. With home ownership rates in Singapore close to 90%, about 70% of the debt on household sector balance sheets comprises mortgage loans. These loans have an average loan-to-value ratio of less than 50%, indicating that households generally have significant net positive equity in their residential properties.  

4. Singapore’s households ability to meet their immediate debt repayment obligations is healthy, with deposits growing faster than total household debt. Their overall debt servicing ability is also sound, with the median Total Debt Servicing Ratio (TDSR)[footnote group="2"]The portion of a borrower’s gross monthly income that goes towards repaying monthly debt obligations.[/footnote] at 43% for new mortgages issued over the past year.

5. That said, there will be a small segment of households who are more highly leveraged and could face difficulties in servicing their debt. Such borrowers should approach their lenders early to explore possible loan refinancing and repayment solutions.

Table 1: Household debt-to-income ratio (DTI), 2018 to 2021[1]

  2018 2019 2020 Average of 2018-2020 2021
Denmark  2.5 2.5  2.6 2.6  2.4 
Norway 2.4 2.4  2.5  2.4  2.5 
Netherlands 2.4  2.3  2.3  2.3  NA 
Switzerland 2.2  2.2  2.2  2.2  NA
Australia 2.2  2.1  2.0  2.1  NA
Sweden 1.9  1.9  2.0  1.9  2.0
Luxembourg 1.8 1.9  1.9  1.9  NA 
Finland 1.4  1.5  1,5  1.5  NA 
Ireland 1.5  1.4  1.2  1.4  NA 
Singapore[2] 1.4 1.3  1.3  1.3  1.4 
United States 1.1 1.1  1.0  1.0  NA 

Source: OECD, DOS and MAS estimates. 


Table 2: Household net assets-to-income ratio, 2018 to 2021[3]

2018  2019  2020  Average of 2018-2020  2021 
Singapore[4]  7.4  7.8  8.4  7.9  9.1 
Denmark 6.8  7.5  8.2  7.5  9.4 
Netherlands 6.8  7.4  8.1  7.4  NA 
United States 5.8  6.4  6.6  6.3  NA 
Sweden  5.6  6.2  NA  5.9  NA 
Australia 4.2  4.5  4.6  4.5  NA 
Luxembourg 4.2  4.3  4.3  4.3  NA 
Finland  3.7 3.9  NA  3.8  NA 
Norway 3.4  3.5  NA  3.5  NA 
Ireland NA  NA  NA  NA  NA 
Switzerland NA  NA  NA  NA NA 

Source: OECD, DOS and MAS estimates.

[1] Based on OECD (2022), household debt (indicator). The DTI in the OECD economies is defined as the ratio of total liabilities of both the household sector and non-profit institutions serving households (NPISHs) to net household disposable income. The cross-economy comparison is made with reference to aggregate data as the median household DTI is not available.
[2] Based on data from the Singapore Department of Statistics (DOS). The household DTI is estimated as the ratio of total liabilities of the household sector to aggregate personal disposable income (PDI). PDI measures income of the personal sector (including households and NPISHs), after accounting for net property income received (i.e., interests and dividends), net current transfers received and personal income tax paid. As the NPISHs account for a small share of the personal sector, the personal disposable income is used as a proxy for net household income in national accounting.
[3] Based on OECD (2022), household net worth (indicator). The net assets-to-income ratio is defined as the ratio of household net worth to net household disposable income. Household net worth represents the total value of assets less total value of outstanding liabilities of households, including NPISHs. 
[4] Based on data from the Singapore Department of Statistics (DOS). The household net assets-to-income ratio is estimated as the ratio of net worth of the household sector to aggregate PDI.




[footnote-group name="1"/]

[footnote-group name="2"/]