SCORES of buyers have withdrawn offers or walked away from thousands of dollars of deposits as the shock of the tough cooling measures reverberated through the housing market yesterday.
Agents have also reported that their phones have been running hot with worried people wanting advice.
And property shares of companies like City Developments (CDL), Keppel Land and CapitaLand fell as well with investors bailing out of the sector.
But one group was smiling yesterday: First-time buyers, who are optimistic that prices will now fall enough to allow them to get onto the private property ladder.
The Government announced new rules on Thursday that raised the seller's stamp duty on new properties to as much as 16 per cent of the sale price if the home is offloaded within a year.
The amount banks can lend on a second property has been lowered to 60 per cent of the home's value.
The Government's move has stunned both sides of the market - developers and some buyers - with neither sure how to move forward.
International Property Advisor chief executive Ku Swee Yong said many of the firm's clients had withdrawn their cheques or postponed decisions to buy.
Others who had paid option fees - around $10,000 for a $1 million property - have walked away from the money rather than sign on the dotted line.
But first time buyers such as credit analyst Mr Joshua Cheah, 29, were upbeat. Mr Cheah, who is renting a flat with his parents and plans to buy a private home, believes the moves will deter speculators and put a property within his reach.
While some analysts say the measures will effectively wipe out all speculative activity and even end genuine investor demand, others in the industry are downplaying the impact.
CapitaLand chief executive Liew Mun Leong says it is 'business as usual' for the firm, with no plans to delay launches or reduce prices in spite of the tough cooling measures.
Law firm Rodyk & Davidson partner Lee Liat Yeang, who acts for many real estate developers, said that although developers are concerned, 'generally they are still optimistic'.
One developer client of the firm said it may go ahead with launches as demand is still there. This is true for many mass market condos who target first-time buyers, which are largely unaffected by the new financing rules, added Mr Lee.
But Mr Nicholas Mak, SLP International Property Consultants' research executive director, said: 'We are expecting developers to delay launches. Whether prices will fall is the big question,' he said.
CDL spokesman Gerry De Silva told The Straits Times: 'The market will take time to absorb the news. We will assess the situation and meanwhile review our strategy.'
Other developers have said they will also take the wait-and-see approach but The Straits Times understands some have already pulled back on marketing with at least three big-name firms yanking marketing campaigns for new launches.
Still, SLP's Mr Mak said there could be a silver lining: Land prices for future tenders could decline in the light of weaker sentiment and in turn lead to cheaper apartments.
Meanwhile, banks say the moves are unlikely to have a major impact on their business.
Ms Vibha Coburn, business director of secured finance solutions at Citibank Singapore, said buyers are not always borrowing the maximum loan they can get due to the high liquidity in the market.