SINGAPORE'S central bank warned that more measures may be needed to curb the risk of renewed speculation in the country's property market, buoyant by low borrowing costs.

The comments underscored the growing concern among policymakers in Asia, who are worried that the froth in residential markets in financial centres such as Hong Kong, Singapore and Seoul could turn into a bubble.

"As Singapore emerges from recession and with the market expecting low interest rates to persist for some time, the risk of a renewed escalation of speculative momentum cannot be discounted," the Monetary Authority of Singapore (MAS) said in an annual Financial Stability Review. "More measures might then be necessary."

The Singapore government in September acted to cool the property market by releasing more land and making it harder for home buyers to defer payments.

Last month Hong Kong's central bank said it would cap the mortgage limit for luxury property at 60 per cent, down from 70 per cent currently, and limit loan values.

South Korea's central bank has warned it would have to raise interest rates to curb a boom in property prices.

The Singapore central bank said property market activity has taken its own dynamics despite the lingering uncertainties in the domestic and global economy.

Singapore's monetary authority also warned that the global financial market rally has outpaced economic fundamentals and any perception that the economic recovery is stalling could trigger a re-pricing of financial assets.

It said the rally in Asian asset prices since the first quarter of 2009 has been supported by abundant global liquidity, but they may be sensitive to removal of monetary accommodation.

"Such market volatility could prompt capital outflows from Asia and, in turn, exchange rate volatility," the MAS said.

Asian stocks, as measured by the MSCI Asia ex-Japan index , have surged 60 per cent this year, outpeforming a 27 per cent jump in MSCI's world equity index.

In October Singapore's central bank kept its loose monetary policy unchanged because it was unconvinced an economic rebound can be sustained.

The MAS said Singapore's financial system has weathered the financial crisis well and domestic financial conditions should continue to improve as the economy recovers.

Singapore banks led by by Singapore's biggest bank, DBS, beat market expectations with a strong set of third-quarter earnings and are better positioned than global peers for post-crisis.

But the MAS cautioned that the situation in the Singapore financial system is not without downside risks, largely due to concerns over the sustainability of the global recovery.