Experts said the appetite for home purchases in Singapore is still strong despite several rounds of cooling measures that were introduced by the government.
In fact, property developers have been selling over 2,000 private homes every month in 2012 -- well above the monthly historical average of 1,400 units.
During the last parliament sitting, National Development Minister Khaw Boon Wan told the House that the five rounds of measures implemented between September 2009 and December last year would need more time to cool the property market.
Although property sales are expected to remain above 2,000 units a month over the next few months, experts said it was unlikely that the authorities would introduce another round of cooling measures soon.
Norman Ho, a real estate partner at Rodyk & Davidson, said: "I don't think any cooling measures should come in any further. ... I don't think (capital gains tax) should be implemented because Singapore, being an open economy, ... it actually has a repercussion on the economy.
"It destabilises the economy. It just doesn't affect the purchasing of residential property itself, but it affects the whole outlook of the economy."
Low borrowing rates and a flush of liquidity in the market have been blamed for the buoyant property demand.
Experts said one way to curb demand is to restrict housing loans available for home buyers.
Donald Han, HSR's special advisor, said: "To restrict the number of multiple investments per investor, one possible option would be to look into the loan-to-value ratio.
"That is, if you are looking at your first property for your own occupation, that loan quantum can be as high as 80%. But once you are buying into your second and third property, that could come down to as (low) as 60% or even 30 to 50%."
Nicholas Mark, research head at SLP International, said: "The problem right now in the residential property market is not the level of speculation nor high price growth.
"Prices are stabilising. In fact in some sectors, prices are declining marginally, while the level of speculation has reached a three-year low.
"The problem is actually over-investment -- there is a risk there could be a bubble caused by shoebox apartments."
Analysts said the rising supply of shoebox apartments is one of the factors that is keeping the property sector hot.
By 2015, some 9,700 shoebox apartments are projected to be ready. Eight out of ten apartments will be in the heartlands, an untested market for such apartments that is the size of four car park spaces.
Some analysts have suggested that any possible cooling measures should just be focused on this segment.
Source: Channel News Asia