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But analysts warn that if the transaction price is too far below the market value, the home sellers may have to top up their CPF with cash.

More than 90 percent of home buyers use their CPF to purchase properties.

For those who made their purchases between 1994 and 1998 - when prices were at their peak - they would be seeing steep losses.

They could minimise the loss by trying to refinance their loans at a lower interest rate.

Donald Han, Managing Director, Cushman & Wakefield, said, "I think for owners like this, there is an option for them. That is to go and refinance their property with a bank and try to restructure their loan and in that sense, under the new refinancing structure, the bank would have a first lien onto the property itself, as opposed to the CPF having the first lien."

There are others who may choose to sell their properties instead.

If they let go at prices that are more than 20 percent below what they had paid, this would have eroded their initial cash top-up and eaten into the CPF amount used for the purchase.

And in this case, they might have to top up their CPF with cash.

If the property is sold way below the market value, the CPF Board has the right to insist for a cash top-up.

Property analysts estimate that about 20 percent below market value is still acceptable.

But beyond that, it will be prudent for owners to check with the CPF Board before they make the transactions.

Analysts do not expect home owners to suffer huge losses, as the property market is now picking up.

Home prices have been inching up over the last 12 months - with the URA price index up by about 2 percent.

Some market-watchers say it will be a good time to buy and sell properties within this year.

Mohamed Ismail, Chief Executive Officer, PropNex, said, "Things are moving a bit more stable and even in our own side, we have seen more interest and transaction for private property, those below S$1.5 million. Therefore, there's no reason to wait.

"As far as public housing is concerned, the new rule of the 6 percent will take place from 1 Jan next year and will go to 8 and 10 percent, so any serious consumer who intends to buy and sell, this will be a better year. There will be more challenges ahead."

Some owners may take the opportunity to buy a bigger property at current market value - even if it means booking a loss on the unit they had bought at high prices. - CNA/ms