2 reasons why analysts are fearing Singapore household debt dangers

Houshold proportions have overstretched.

Results from the Credit Suisse Equity Research's proprietary housing survey makes them relatively sanguine about the ability of the majority of Singapore households to service their debt for two key reasons.

First, the proportion of households that have overstretched themselves looks small.

Here's more from Credi Suisse:

According to the survey, only 3% of respondents with mortgages have debt service payments above 60% of income. On this basis, a rise in interest rates is unlikely to result in huge problems for the majority of households.

Second, households with higher debt service burdens generally have substantial liquid assets.

The survey also shows that households with higher debt service burdens tend to have substantial liquid assets. In other words, the more leveraged households have a relatively high stock of liquid assets to back their liabilities. These households are also likely to possess more non-liquid assets – for instance a property that they can rent out, and thus have a larger buffer against a rise in interest rates and their debt service burdens.