The government faces a difficult challenge. Should they relax the property cooling measures? These measures have hurt the property developers and the banks and slowed down the property market considerably. Many property agents and conveyancing lawyers have also seen their incomes dropped sharply. A large number of property agents have left the industry.
If the cooling measures are relaxed, there is the risk of renewed speculation in property, leading for a further runup in prices. Already, these prices are at levels which are beyond the reach of most working families.
My guess is that the government will introduce measures that will help people to buy their homes, but will still want to see the prices maintain at their current levels. No more run off in prices, but no serious drop in prices either.
The government has helped the sale of HDB flats by increasing the grant for first and second-time buyers. This grant is also available for buyers of executive condominiums. Perhaps they may extend the grants to buyers of private properties.
They may also introduce some measures to help developers to tide over the difficult period. They may allow a longer time for developers to sell their new developments by reducing or removing the penalties for not meeting the deadlines for the completion of their developments.
Whatever action is taken by the government, the recovery in the property market will be slow and painful, for the developers and existing home owners.