Singaporean government announced on Thursday that it would adjust the Additional Buyer's Stamp Duty (ABSD) rates and Loan-to-Value (LTV) limits on residential property purchases, so as to cool the property market and keep price increases in line with economic fundamentals.

According to a media release jointly issued by the Ministry of Finance, the Ministry of National Development and the Monetary Authority of Singapore, the government will raise the ABSD rate by 5 percentage points to 20 percent for foreigners buying any residential property, and by 10 percentage points to 25 percent for entity buyers.

It will also introduce an additional ABSD of 5 percent for developers purchasing residential properties for housing development.

As for Singapore citizens and permanent residents, the ABSD rates for their purchasing the first residential property will be retained at zero and 5 percent respectively, but the rates for their purchasing the second and subsequent residential property will be raised both by 5 percentage points to 12 percent and 15 percent, respectively.

Besides, Singaporean government tightened the LTV limits by 5 percentage points for all housing loans granted by financial institutions.

The media release said that the city-state witnessed a sharp increase of 9.1 percent in private residential prices over the past year after a close-to-four-year gradual price declining, and the demand for private residential property had also seen a strong recovery as transaction volumes continue to rise.

It added that the government took the adjustments, worrying about that the price increase could run ahead of economic fundamentals and raise the risk of a destabilizing correction, especially with rising interest rates and the strong pipeline of housing supply.

"The Government will continue to monitor the property market and adjust our policies as necessary, to maintain a stable and sustainable property market," the media release said.