Falling property prices in Singapore - one the world's most expensive housing markets - have provided some much needed relief for the nation's banking sector, analysts told CNBC.
"The gradual decline in property prices is credit positive for Singapore banks because it relieves pressure on bank asset quality," Moody's analysts said in a note published Monday.
"Further price increases would have increased the risk of a real estate price bubble bursting," they added.
Talk of a bubble forming in Singapore's red hot property market has been a hot topic in recent years, encouraged by low interest rates and an influx of speculative interest.
Many analysts have warned that once the U.S. Federal Reserve hikes rates - a move expected in mid-2015 - many owners of Singaporean property could potentially default on their mortgage payments, which would be bad news for banks. U.S. interest rates are used as a benchmark for Singapore monetary policy.
But these fears have eased recently amid signs of cooling prices in recent months. Furthermore, a number of government measures introduced over the past two years have helped deter speculative buying and stopped home buyers from borrowing more than they can afford.
Last week, a flash estimate for the Urban Redevelopment Authority, showed prices had been cooling since December.
"The problems with trying to over leverage yourself today is that interest rates are bound to rise in the next few years and the global economy is in a fragile situation... so there is a likelihood for certain events to cause a shake-up in financial markets," Kenneth Ng, head of equity research at CIMB bank told CNBC on Tuesday.