SINGAPORE (Aug 31): Singapore banks are strong enough to withstand a downturn in the city-state's property market as severe as the 45% plunge in private-home prices triggered by the 1997-1998 Asian financial crisis, says Fitch ratings agency.

Fitch believes Singapore banks' housing-loan quality will be shielded by the banks' disciplined underwriting standards, and healthy loan-loss reserve coverage of 113% at end-June 2016.

“We believe Singapore's private-home prices will weaken further amid an influx of new homes, having declined 9.4% from their peak in September 2013; signs of an oversupplied market have emerged with vacancy rate of non-landed private homes rising to its 11-year high of 10.4%,” says Fitch.

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