This explains why there won't be panic selling of Singapore homes

Credit Suisse makes a convincing case.

Data gathered by Credit Suisse all suggest that Singapore homeowners won't be selling their homes due to their inability to pay their mortgages, barring any major external shocks.

"While many may have exchanged personal encounters or stories on how some borrowers out there have been really stretching their balance sheet, MAS did also recently quote that based on the current market, only about 5-10% are over leveraged," said Credit Suisse.

"Given the current interest rate outlook, our survey findings suggest that only c.4% are at risk, with over 50% of their gross monthly household income tied to liabilities, and 10% if you include those with over 40%," it added.

Credit Suisse also highlighted that of those with mortgage commitments, 83% of the properties are largely for self-occupied properties, while only 6% indicated that they have mortgage for both self-occupied and investment properties.

"This supports our view where we expect overall prices to remain flattish as we do not expect there to be 'panic selling' (unless we encounter an external shock) as the recent purchases have been acquired under a much more stringent process including higher LTV and stamp duties, which may have already dissuaded some of the speculative buyers in the market, as the government has effectively been clamping down on the property sector since Sept 2009," said Credit Suisse.