As interest rates rise, it becomes harder for home-owners to refinance mortgages during a property downturn.

Economists are also concerned about households with lower incomes.

The poorer families spend a greater percentage of their income for basic needs such as transportation, food and utilities.

Savings can be considered an asset, whereas credit card debts are a liability.

In November, data released by the Monetary Authority of Singapore in its latest Financial Stability Review indicated that the average savings rate for Singaporeans fell to 34.6 percent in the third-quarter.

It is higher than the 31 percent long-term average, but is down by 0.5 point from a year earlier.

According to the latest data on household balance sheets, credit card debt represents 3.8 percent of total household liabilities.

Total household liabilities have been declining for the 8th consecutive quarter as a proportion of personal disposable earnings due to lower debt levels combined with continued strong income growth.

It is important to keep an eye on the potential for a downturn in housing prices after months of high property values.

The decrease in savings follows an increase in private consumption expenses of 8.4% on a year-over-year basis in the 3rd quarter to $52.7 Billion.

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Singapore’s CPI, which measures the price of all consumer goods in Singapore, rose from 4.1 to 4.7 on an annualized basis in October.

The core inflation rate, which excludes accommodations and private transport, rose to 3.3 percent in October from 3 percent in September.

Singaporeans spend more overseas because of the stronger Singapore dollar.

When you look closely at the CPI figures, it becomes clear that the holiday expense grew 7.8% in October on an annual basis. It was the third largest jump behind private transportation (11.7%).

A rise in spending has led to a higher balance on credit cards.

The maximum amount an individual household can borrow to purchase a house is determined by the ratio of loan-tovalue.

For a mortgage loan, the maximum is set at 80 per 100 of the value of the home.

Experts said that while the average household net worth is growing, the situation could change if living costs continue to increase.

The Department of Statistics has reported that, on an annual basis, the household net wealth rose by 7.6 % to $2.72 trillion during the third quarter of 2023. However people are also saving less while credit card debt continues to rise.

After paying off debts, net worth measures how much money a family has left.

A household’s net worth is positive if it has more assets that liabilities. This buffer will protect the household from unexpected expenses.