SINGAPORE, Jan. 19 (Xinhua) -- In the last few days, many home buyers and sellers in Singapore scrambled to cancel their property deals or do all over again their calculations of the total outlays of holding investment properties, after the government had introduced another round of property cooling measures late last week.

According to market watchers, some developers have started to cut prices and offer discounts on a case-by-case basis in a bid to stop buyers from walking away from planned purchases, with a listed developer reportedly offering a group of investors a discount of around 5 percent while another developer offering to absorb the buyer's stamp duty.

Under the new property cooling measures - the fourth in two years, the holding period for Seller's Stamp Duty (SSD) will be increased from three to four years.

In addition, the SSD rates will go up to 16 percent, 12 percent, 8 percent and 4 percent for residential properties sold in the first, second, third and fourth year of purchase respectively. Finally, the Loan-to-Value (LTV) limit will be lowered to 50 percent for housing loans to purchasers who are not individuals and 60 percent to individuals with one or more housing loans. All measures take effect from Jan. 14, 2011.

Although the new measures are not entirely unanticipated, the timing has caught all analysts by surprise, prompting some to speculate on the reasons behind the government decision to act again at this juncture.

Donald Chua, the property sector analyst of CIMB Research Private Limited, believed that with a total of 1,699 private home units sold in December last year, marking the best December sales in three years, and took 2010 sales way surpassing previous peaks in 2007 and 2009, the local property market may have appeared still too hot for the government to be comfortable with.

Referring to the details of the latest cooling measures, Min Chow Sai from Nomura Singapore Limited pointed out that the purpose of lengthening the SSD's holding period and raising SSD rates are probably to discourage speculation among pre-sales buyers with the intention of selling the properties before completion.

Many analysts agree that the latest cooling measures are quite harsh, and their impacts could be felt immediately and lasted for a while. Liew Mun Leong, who is the CEO of CapitaLand, one of the biggest listed developers in Singapore and the region, expects private home prices and sales volume to fall following the latest round of property measures, but on the bright side, he thinks the measures will make it easier for the group to win land parcels in government tenders.

CIMB Research's Chua also predicted that latest measures could compel potential investors and speculators to think twice before finalizing investments, thereby affecting transaction volumes in the near term. Coupled with news of buyers forfeiting their deposits and relinquishing options to purchase some properties, sales in January and particularly February will be the key numbers to watch.

That cautious view on the impacts of latest government measures is also shared by Lock Mun Yee, the property analyst of DBS Group Research. With the latest round of cooling measures in place, he now expects home prices in Singapore to move only between 0-3 percent this year, and projects primary home sales volume to be lower at 10,000 units throughout the year.

As for whether government will introduce more cooling measures going forward, analysts widely agrees that a lot will depend on the home sales data released in coming few months. CIMB Research's Chua said, "With the government warning of further intervention if property prices keep spiraling, we believe that policy risks have yet to peak for developers."

Nomura Singapore's Min also warned, "Going forward, should the latest measures fail to cool the market, we believe there is potential for more cooling measures ahead, including Holding Period Tax, which is also part of anti-speculation measures introduced in 1996 to impose tax on gains from property sales within three years of purchase."