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Singaporeans have accumulated significant net wealth over the past years and are growing their nest egg.

The household net wealth climbed 6.6 per cent to $660 billion last year from $619 billion in 2004, according to figures from the Department of Statistics.

This is thanks to the good economic growth and rising asset prices.

But the composition of household assets showed a shift towards financial assets like equities, insurance and unit trusts.

Investment in financial assets grew by 8.9 per cent compared to non-financial assets like property, which rose by only 1.4 per cent.

Kee Siew Poh, financial consultant at IPP Financial Advisers, said: "It could be that in the past 5 or 7 years, those who have gone into property as a form of investment have been 'burnt' severely."

"People realise that property may not be the only form of investment instruments. There is increased awareness among consumers that they want their money to work harder. This, coupled with very aggressive marketing by the banks, has also caused them to look out for some of these instruments that could benefit them further."

However, mortgage debts still make up the bulk of household liabilities.

The share of bank mortgage loans went up from 30 per cent in 2000 to 40 per cent in 2005.

But HDB loans fell from 43 per cent to 34 per cent over the same period.

Analysts say that this could be the result of policy changes when banks took over the provision of market-rate housing loans from HDB.

A drop in the cash down-payment rate - from 10 to 5 per cent - could also encourage greater borrowing.

Going forward, financial analysts expect household net wealth to continue to rise.

But they say investors must also ensure they have a portfolio of investments that could withstand market shocks and yet make decent returns.

IPP Financial Advisers' Kee Siew Poh said: "Singapore is also becoming a wealth management hub. This certainly is a good trend, going forward. We are just lagging behind Australia, UK and America in this. It is also good that Singaporeans are saving up for retirement and making their money work harder."

Analysts also say that the higher demand for financial products has resulted in greater level of monitoring among the banks and the authorities.

This will ultimately benefit the public. - CNA/ir