The Singapore government may roll out more policies to prevent property bubble, including lowering borrowing limit to 80% of home value from 90% currently, says Swiss investment bank UBS AG, according to Dow Jones.

It cites strong response of 32 bids from developers this week for small residential land parcel put up for sale by government, with the highest offer at $38 million.

UBS notes the government’s land sales programme for 1H10 expected to yield more than 3,000 units.

“We remain cautious that developers who purchase these land parcels could overpay, only to be faced with lower demand if more policy measures are released in 2010.”

Cites experience in 1996, when government increased land supply for private homes to temper prices and lowered loan-to-value limits to 80%.

“As a result, developers which bought sites in 1996 and 1997 could not make these projects profitable as demand waned and prices weakened. In some cases, developers held the land for up to 3–8 years before launching the homes for sale,” says UBS.