The price of larger resale flats and the number of resale deals might dip by about 10 per cent as a result of the Housing Board's latest measures, say experts.

Cash premiums paid for them could also decline, as news of the changes starts sinking in.

On Tuesday, National Development Minister Khaw Boon Wan unveiled policy changes, including tighter mortgage terms and shorter loan tenures, that aimed to encourage financial prudence and to stabilise the market.

But the resale HDB market, already at its lowest since 1997 in terms of transaction volume, is likely to take a beating.

Under the new measures, the tenure of an HDB loan was reduced from 30 years to 25 years.

For monthly mortgage repayments, the ratio was brought down from 35 per cent to 30 per cent of a borrower's gross monthly income. The maximum tenure for bank loans was also reduced from 35 years to 30 years, with smaller loans available for those exceeding 25 years.

According to analysts' calculations, this means a household earning $5,000 and $4,000 a month will see the size of its HDB loans reduced by $100,000 and $86,000 respectively.

New PRs, who do not qualify for new Build-To-Order flats, now need to wait three years before they can buy a resale flat. They make up a fifth of the resale market.

Figures from the Singapore Real Estate Exchange showed that overall median premiums have fallen to $20,000, down from $35,000 at the start of the year.

Analysts added that the ramp up in housing supply and raised income cap for the Special Housing Grant could also draw demand away from the resale market.

Credit from The Straits Times - 29 August 2013