Here's why analysts think it's too early to remove Singapore's cooling measures

Mortgage rates won't rise anytime soon.

According to Maybank Kim Eng's property developer analyst Wilson, the anti-speculation measures,
introduced since 2009, will unlikely be removed in 2014.

In his sector report, Tipping On Tapering, dated 17 Dec 2013, he explains why.

Here's more:

 Mortgage rates are only expected to rise in 2015. Removing the measures prematurely could spark another round of irrational exuberance.

 According to its Financial Stability Review 2013 issued on 3 Dec, the Monetary Authority of Singapore (MAS) estimates that 5-10% of borrowers in Singapore have monthly debt-servicing burden greater than 60%, suggesting that they are overleveraged.

Should mortgage rates rise by 3ppts, the MAS estimates that the proportion of overleveraged households could increase to 10-15%.

To put that in perspective, ~18% of resident households live in private properties as at end-2012, which implies that the number of overleveraged households may be more than half of the total number of households living in private properties.

While the investment and speculative demand has waned, its proportion remains high at 26%.

From the outset, the government has said that the Total Debt Servicing Ratio (TDSR) framework is structural in nature and meant for the long term in order to instil lending discipline among the financial institutions and encourage financial prudence by individuals.