THE property trade appears caught off-guard over the intervention measures to tamp down froth in real estate, before a bubble develops. Most developers and consultants put a brave face on the curbs, suggesting that elimination of the two partial mortgage-deferment plans would not interrupt market tempo too much. Their justification: Fewer buyers have gone for these types of loans as premiums charged by developers have been rising, by up to 5 or 6 per cent. But industry and URA sampling showed a quarter of purchasers in select launches chose interest absorption or interest-only loans. In any analyst's book, a proportion of this size is a market mover. The Government is justified in stopping back-door market churning through the issue of these soft loan terms. Indeed, it should be alert to whatever newfangled payment variations the industry could dream up, if these work against orderly growth of the market.

A more insightful industry view of National Development Minister Mah Bow Tan's announcement was that the measures were drastic relative to the market recovery, described by some as still tentative. Judgment must wait several months to see how the market will behave. But underlying this lament is the barest hint that, perhaps, developers had been pushing their luck, stoking the sellers' market by raising launch and relaunch prices by too much, too fast. (This newspaper had warned against the temptation.) This in turn drove the famous old anxiety into buyers, who piled in convinced the price spiral was achieving momentum. That may be true. Sales up to last month of 11,700 flats already far outstrip the full-year 2008 figure of 4,300. Prices across the condo classes have leapt by multiples of 10 per cent, to reach 30 per cent for quality developments.

Speculators with shallow pockets and a glint in their eye will be the first to be expelled from the market with the soft loan debarment. Good riddance. The restrictions will also send back to the HDB queue far too numerous of those ambitious young couples who are not ready for private property. This is fortuitous, too, for gradual social levelling up. The trade says the present rush is seeing many replacement buyers who had sold their homes in en bloc deals in 2007. Once they are off the market, upgraders will account for steady but not precipitate demand.

The Government's concern in stepping in this soon is rightly to prevent property asset-price inflation. This it does by also increasing land supply. Once this is achieved, a mature market with demand-supply equilibrium and price stability should ensue. Nice in theory - and the timely intervention has a fair chance of making it work.

This article was first published in The Straits Times.