Actually I had been thinking about this question for a while, and the most recent development actually confirmed my hypothesis.
Ceteris paribus - other things equal - the SG government, as the biggest landlord in Singapore will want property and land prices to rise in the long term, to Temasek's and by proxy its advantage.
But in the short-term three factors had been holding it from doing so.
First, a recent SG Economic competitive report had pointed to two key factors that had made Singapore very uncompetitive internationally. One is expensive land and real estate prices; and two, low labour productivity. Both had its roots in LHL's administration's FT-policy.
Indeed from 2009-2013, the LHL's administration was very slow getting a pulse on and reining in the sky-rocketing property prices caused by increased demand when LHL artificially jacked up the foreign population by 1,000,000 over a short period without adequate infrastructure planning, flippers taking advantage of the housing shortage, against the background of easy and cheap housing loans with the US Federal Reserve flooding the money markets with cheap supply of monies.
LHL, a globalist at heart is insistent on pushing ahead with the FT-policy and since he had not lived a single day of his existence as a normal Singaporean, he cannot feel the pains of the man in the street and is not backing down on letting in more and more FTs into Singapore because he is deeply sold on the population ponzi, get-GDP-up-fast economic solution. Of course there are other ethic diversity consideration which is another essay on its own.
So instead of targeting the root-cause - FT-policy - of Singapore's uncompetitive problem, policy makers are forced to focus their attention on the two symptoms - high real estate prices as well as low labour productivity. To tackle low productivity, there's the various schemes such as PIC and the various WDA training schemes etc.
To tackle high real estate prices, they were somewhat behind the curve from 2010 to 2013, but had gotten their act together since. Now there here are three layers of stamp duty in Singapore to rein in demand, and thereby prices: the Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), and the Seller’s Stamp Duty (SSD)
SSD - Essentially this is to hit directly at the 'flippers'. Thus when sold within the first year after being bought the SSD will be 16% high; when sold in the timeframe of one to two years after the purchase 12% will be due; when sold between two and three years after the purchase the SSD would be 8% ; and lastly, when sold between three and four years after the initial purchase SSD will amount to 4% of the property value.
ABSD - At 15% flat, it is targeted at all the Foreigner buyers. Since Singapore's properties is still cheaper than regional property market like HK, ABSD is put in place as more of a psychological deterrent to foreign speculators. But if you are a national/permanent resident from the US, Switzerland, Liechtenstein, Norway and Iceland, you DO NOT need to pay the ABSD.
BSD - a 3 percent ad valorem tax payable by the buyer. The recent hike to 4% for properties higher than $1 million is actually very indicative. Why not set the limit at $2 million or $3 million? The Government clearly still believe the mass-market condominiums are over-priced at the moment.
So after a huge fight, the LHL's administration had finally managed to suppressed the real estate prices to the benefit of Singapore's national competitiveness. So I don't think it will not let it appreciate too much too soon and let literally years of efforts go to waste.
Second key consideration is that real wages in Singapore had not grown much because of LHL's 'cheaper, better, faster' policy. So any upsurge of property prices without substantial wage growth would be akin to committing political suicide twice over.
Third, at the global macro level, the Fed is probably going to increase rates by 1-2% within the next 24 months. For a typical $1.2 million loan for a $1.5 million condo when i/r goes up by 2%, the extra monthly repayment would be an extra $2,000 per month. And against the backdrop of weakening rental yields. This also means that about 25% or 1/4 of SG property loans borrowed at tight margins will be at risk of defaulting.
This bubble was a result of LHL administration slow actions in preventing the marginal borrowers from entering the property market at its peak in the first place; and whilst MAS had been prepping solutions with the banks when the inevitable happens, the SG Government will not allow the problem to be made worse than it already is by allowing more marginal borrowers into the market with TDSR, or adjusting the ratio when necessary.
So what do we know so far?
The LHL's administration had allowed real estate prices to shoot up too much and too fast such that the country's global competitiveness had been badly hit. It cannot afford to drop the ball again in the next economic cycle.
The macro monetary environment is also not in favour of credit expansion. About 25% or 1/4 of SG property loans borrowed at tight margins will be at risk of defaulting when the Fed hike rates within the next 24 months.
With the tighter credit situation and the 'force/voluntary-selling' that comes along with it, there will be lesser domestic demand and increased supply of both public and private housing in the SG property markets over the next 24 months.
And all the would-be 'flippers' would also had been trapped by the stagnant prices since three years ago and couldn't 'flip' even if they wanted to; and their best hope now is to draw on their cash savings to service their monthly loans against the backdrop of lowered rental yield.
So, all factors point to the fact that property prices in Singapore is unlikely to go up in the SHORT-TERM.
Caveat Emptor: The one lever that the LHL's Administration could still use to increase property prices in Singapore in the very immediate term is the ABSD - FOREIGN DEMAND. Because of the relative valuation of regional property markets like HK, the SG property market is still attractive to foreign buyers if the ABSD is removed overnight. But it would be utterly irresponsible for the LHL's Administration to do so.