SINGAPORE home prices rose in the fourth quarter at the fastest pace in more than a decade, the latest marker of a surge that prompted the government to introduce cooling measures last month.

Private property values climbed 5% from the previous quarter, according to Urban Redevelopment Authority flash estimates released on Monday. That’s the highest quarterly growth since the second quarter of 2010 when prices jumped 5.3%. For 2021, prices increased by 10.6%, also the highest since 2010.

Singapore’s price spike underpins the government’s move to impose a fresh round of property curbs, which included raising additional stamp duties for second-home buyers and on foreigners purchasing private residences. If left unchecked, prices are likely to run ahead of economic fundamentals, the government cautioned at the time.

The rebound fed a property frenzy that generated S$32.9 billion ($24 billion) in home sales in the first half of last year, double the amount in Manhattan over the same period, driven by demand from the ultra-rich flocking to the Southeast Asian business hub. Singapore’s central bank last month warned that household debt is higher than pre-pandemic levels, driven by property loans.

“Looking at price surge in the fourth quarter, it explains why the government introduced the property curbs because they had already seen the data and saw this coming,” Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA. “If they had not acted earlier, people would have been speculating that cooling measures are on the cards.”

Buyers have been capitalizing on low interest rates and expectations that prices will climb further as the economy recovers. An acceleration in the final quarter helped propel overall growth for the full year to 7.2%, the fastest since 2010.

The property cooling measures will test the market’s resilience. Singapore’s property market has held up well in the last two years despite suffering from the worst recession on record in 2020 and enduring several start-stop virus restrictions last year.

Analysts previously said that the property curbs may be a short-term fix in a market with an insatiable appetite for homes. While the measures may damp prices and sales in the next quarter or two, they may rebound as early as the second half of this year.

Demand may pick up slightly after the Lunar New Year in February though the level of transactions may be lower than in recent months, said Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

“Prices may stabilize and rise at a much slower pace in the next few quarters. But values are not likely to fall because developers have bought the land parcels at quite high prices,” she said. — Bloomberg