| National Development Minister Mah Bow Tan said the government would step in if property prices rise excessively.
He was responding to concerns over developers wanting to raise property prices shortly after the government eased the financing limits on property purchases.
However property analysts say developers will more likely reduce the discounts on properties rather than raise the prices.
Just days after the government relaxed its rules on home ownership and financing, some developers have already hinted on raising their property prices.
And this is leading to concerns that property prices may again sky-rocket, like they did in the mid-90s.
Mr Mah said: "If the end result of this is that the market goes up and is supported by economic fundamentals, then that's it. If it becomes excessive like in 1996, then I think as we did in 1996, the government will step in. But that can only be on an exceptional basis."
But Mr Mah felt it was premature to speculate on how prices would move.
He said the situation back in 1996 was different from today.
Back then, interest rates were high and it was easy getting liquidity.
But now, with zero speculation and relatively low interest rates, home buyers are buying properties more for their own use.
Donald Han, Managing Director, Cushman & Wakefield, said: "Developers may be tempted to raise prices...for projects that have been selling very well, the take up rate has been extremely good. And even then, I think it's selected to just a few projects. And even if they were to increase price, I think it will not take place in that manner, but probably to reduce the amount of discount that's given to a particular property."
Analysts say most developers will probably try to re-market their properties over the next few weeks.
But for them to justify a price hike, there has to be increased activity in terms of transactions.
They say the market should ultimately dictate the prices, not the government.
Property analysts say the less interference the better, now that new measures are already in place.
It is better to see how well the market performs and let the market sets its own pace in terms of adjusting the property prices.
Market watchers say the current system of the reserve list should also limit an excessive surge in property prices as it releases land parcels according to market demand. - CNA /ch
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