Bruneians’ appetite for home improvement remained weak in the last quarter of 2021, with borrowings for the purpose hitting fresh multi-year lows. Data from Brunei’s central bank show that personal loans for home interiors and décor plunged 45.63 per cent to 16.43 mio Brunei dollars (BND, EUR 11.24 mio) in the fourth quarter of 2021 compared to the same period the previous year, its lowest value since the central bank started operating in the country in 2011.
Property financing for structural home improvement and renovation, meanwhile, broke the BND 400 mio barrier for the first time since the third quarter of 2014 to settle at BND 394.48 mio in the fourth quarter of 2021, down 4.66 per cent from the same period the previous year. Both portfolios have been shrinking since the pandemic began in the first quarter of 2020.
Take-up for home purchases, meanwhile, remained strong, hitting a new historical high of BND 867.29 mio – though this is just a 5.2 per cent uptick from the same quarter in 2020.
Home improvement lending gauges people’s inclination for residential enhancements in credit-reliant Brunei, where 60.4 per cent of the domestic loans taken out of the banking system go to household spending.
Home improvement retailers in the country have said that the combination of having new residential properties up for sale as well as the depressed prices for new houses have led Bruneians to buy new homes instead of renovating current ones.
Data show that houses in Brunei are becoming more expensive, with the residential property price index at 97.41 as of the fourth quarter of 2021, from 90.56 in the same period the previous year.