Odds are rising that cooling measures will be eased in 2016

Policymakers get more leeway as rates rise.

Property prices in Singapore are expected to book steeper declines as interest rates normalise, which in turn will give the government more leeway when to ease policy cooling measures.

"Now that interest rates are normalising it gives the government a lot more leeway to relax the measures. The speculative demand will not be there anymore," said analyst Derrick Heng at Maybank Kim Eng in response to questions from Reuters.

The U.S. hike, widely expected between September and year-end, is likely to trigger similar credit-squeezing in Singapore. Analysts said the development is one factor that could prompt the government to review measures, which have particularly hit speculative and foreign demand. But it will only act if prices have fallen sufficiently.

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