THE cooling measures announced yesterday will surely send a chilling wind throughout the property market in the weeks and months ahead.
The seventh and most comprehensive set of measures so far are targeted at those looking to park their excess cash in the local property market.
Singaporeans looking to buy more than one property will have to pay additional buyer's stamp duty of between 7 per cent and 10 per cent.
Their loan amounts will also be drastically slashed, as the Government took aim at those who are looking to profit from extremely low interest rates today.
Analysts such as Mr Alan Cheong, Singapore research head at Savills, were shocked at the move.
"It is as if I have a rodent problem, but I'm going to drop a nuclear bomb on this," he said.
The measures are, without a doubt, harsh. But will they prove to be an overkill?
From the Government's point of view, the moves were clearly needed to cool a market where prices are "running ahead of fundamentals", as Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said yesterday.
He also revealed that the set of measures had been prepared weeks ago and that they were "just waiting for fourth quarter numbers" to release them.
"We were quite concerned about the re-acceleration in prices that we've seen in both the private market and the HDB resale market," he said.
In other words, the move was not a knee-jerk reaction but a calculated move aimed at sucking out speculative demand in a market that just cannot get enough of property investments.
Earlier this month, on the day fresh economic data was released to show that Singapore's economy had grown by just 1.1 per cent in the final three months of last year, property prices had risen by a larger than expected 1.8 per cent.
And for the whole of last year, while the economy grew by just 1.2 per cent, the property market rose by 2.8 per cent.
In fact, in the first three weeks of January, there were signs that the property market was picking up again.
Echelon, a 508-unit condo in Alexandra View tagged at a pricey $1,700 per sq ft (psf) on average, sold 200 units just last weekend.
It has been a similar story in public sector housing.
Prices of HDB resale flats rose at their fastest pace for the year in the fourth quarter, climbing 2.5 per cent. A big part of the still-buoyant demand is the stark fact that money is so cheap.
Interest rates remain extraordinarily low, close to zero. And to top it off, central banks in the US, Europe and Japan have been releasing liquidity to the market, some of which would have eventually flowed into property here, analysts said.
As such, the measures were targeted at staunching the flow of funds threatening to flood the market, said Mr Ong Kah Seng, director of R'ST research.
He believes that while sales volumes will tank in the months ahead, prices may just stabilise and "at most decline by single digits, maybe 7 per cent".
The measures are, however, not without risks.
For one, the economy is heading towards a slowdown.
Notwithstanding the fact that fourth quarter property index prices shot up unexpectedly, overall, demand has been slowing.
Take the private residential market. It rose 2.8 per cent last year, but this was half of the 5.9 per cent rise seen in 2011. The measures could cause the market to over-react in a panic.
As Mr Cheong noted: "When you implement such administrative measures, you run the risk that this will be the last measure that breaks the camel's back."
The Government recognises this risk and did provide a caveat.
In a departure from past announcements, it specifically said yesterday that the higher stamp duties and loan limits are temporary and will be reviewed in future.
But will it be able to react in time and differentiate an intended slowdown from a potential crash? Hopefully, the answer will be yes. If not, the measures could do more than cool the market; it could lead to a deep freeze that will hurt everyone.