Singapore raised down payment requirements for second mortgages and boosted sales taxes to curb property speculation, sending shares of the city’s biggest developers down the most in 11 months.

Individuals with more than one mortgage can borrow up to 60% of a property’s value, down from 70%, while the stamp duty on homes and land sold within one year will rise more than fivefold, the government said in a statement yesterday.

CapitaLand and City Developments fell more than 3% on concern the government’s intensified efforts to cool record home prices will dent sales. Singapore follows Hong Kong in raising sales taxes and loan restrictions as economies across Asia seek to damp the threat of asset bubbles caused by capital inflows and low interest rates.

“The government is erring on the side of caution,” said Donald Han, Singapore-based managing director at Cushman & Wakefield, the world’s largest closely held real estate services company. “We need to monitor this because history has shown that some of these measures lasted only two to three months, and the market comes right back to full life again.”

Singapore private home prices climbed to a record as the nation’s fastest economic growth since independence in 1965 overwhelmed government measures to cool the market. Attempts to rein in prices started in 2009 when interest-only loans for some housing projects were barred and developers were barred from covering interest payments for apartments still being built.

STOCKS SLIDE

Singapore’s Straits Times Real Estate Index fell 0.3% at the close, with three stocks falling for every two that gained. CapitaLand, Southeast Asia’s biggest developer, declined 3.4% to S$3.71, and City Developments, the second largest, lost 4.6% to S$12.16, both retreating by the most since Feb. 22.

Singapore joins markets across Asia that added measures to curb property speculation driven by low interest rates. Singapore’s three-month interbank rate fell to 0.43751% on Jan. 3, the lowest since Bloomberg began compiling the data in 1999. It was at 0.43779% today.

Hong Kong imposed additional taxes and higher down payments in November after home prices climbed more than 50% since the beginning of 2009. China, battling 18 months of price increases, suspended third mortgages and raised interest rates for the first time in three years.