Singapore's famously efficient government faces a challenge that has stymied many a country before: safely guiding its toppish property market to a soft landing as interest rates rise.
Property prices in the city-state have surged over 60 percent since 2009, propelled by rock-bottom global interest rates and quantitative easing in developed economies, even as Singapore's government has enacted a series of cooling measures to prevent a bubble from forming.
(Read more: A risky year for the global property market?)
But the prospect of rising interest rates as the U.S. Federal Reserve begins tapering its asset purchases has spurred fears that Singapore's property market could be headed for a crash as higher mortgage payments could spur forced selling and defaults.
This week, Singapore indicated the specter of forced selling remains a serious concern, with the central bank, the Monetary Authority of Singapore (MAS), relaxing one of its cooling measures, the Total Debt Servicing Ratio, or TDSR. The measure aimed to ensure that buyers' monthly payments do not exceed 60 percent of their income, so they wouldn't be caught out by a spike in interest rates. Most mortgages in Singapore have adjustable, rather than fixed, rates.