"While the current level of speculative activity in the market is still lower than what it was at the height of the property market boom, and overall price levels are below the previous peak, there is a risk that the market could overheat in the next few months," the government said in a late Friday statement.

The new measures, which take effect on Saturday, do not affect first-time buyers of government-built HDB apartments who can still borrow up to 90 percent of the property value.

Singapore private home prices have rallied strongly in recent months, with the government's index gaining 7.4 percent in the fourth quarter of last year following a 15.8 percent quarter-on-quarter rise in July-September.

The government said that with the new stamp duty, sellers will have to pay up to 3 percent of the value of the property transaction.

It added that while fewer than 10 percent of housing loans in Singapore involve loans exceeding 80 percent of the property value, "there are signs that more housing loans are originating at higher LTV bands".

Mohamed Ismail, CEO of PropNex, a firm of property agents, said the new government measures will affect mainly homes in prime areas, which are the usual focus of speculators.

As for homes in outlying areas, the impact will be mostly psychological since loans exceeding 80 percent of the property value are not popular due to the higher interest rate charged by banks in Singapore.

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