Singapore's beaten down home prices may find hopes of a recovery from an unusual source: car loans.
In May, Singapore's central bank unexpectedly eased restrictions on car loans, both by raising the maximum permitted loan-to-value ratios and extending the maximum loan tenure from five years to seven.
It was a significant change in a country where cars are rationed and buying one requires not only purchasing the vehicle, but also buying at auction the permission to own it. That permission, called a certificate of entitlement (COE), is pricey, with the June auction coming in around 53,000-56,000 Singapore dollars ($39,100-$41,300), down from levels over 90,000 Singapore dollars in 2013.
Some analysts pointed to the eased car loan restrictions as a sign that the central bank may also soon ease measures that were aimed at slowing the flow of credit to the property sector. Those measures included limits on the total amount of debt a borrower could take on as a percentage as income, as well as additional stamp duties on property buyers.
Credit Suisse said in June that it expected the market would begin pricing in rising chances that the cooling measures' days were numbered. The bank predicted a change by the end of 2016 and pointed to stamp duty as likely to be the first cooling measure to go.