Demand for Singapore real estate will fall next year, according to a report from global accountancy firm PricewaterhouseCoopers, which said the market slipped four places in its 2014 ranking of property markets.
According to PwC's Emerging Trends in Real Estate Asia Pacific forecast, published in conjunction with the Urban Land Institute, concerns around oversupply in some Singapore property sectors have damped appetite.
"Singapore slipped off the top five spots for the first time since the publication first started in 2007," said Choo Eng Beng, real estate leader at PwC.
(Read more: Singapore's wealthy help drive global property demand)
The decline may come as a surprise to many, given that the Southeast Asian capital is one of the most expensive real estate markets in the world. Low interest rates have spurred a massive rise in prices, and as a result regulators have introduced a swathe of market cooling measures since 2009.
Choo said contradicting factors were creating a mixed outlook for Singapore's real estate market.
"On the one hand, investing in real estate is getting more expensive due to the expected higher interest rates, compressed capitalization rates [which refer to the rate of return on a property based on its expected income] and tighter regulations. On the other hand some see room for better returns with low vacancy rates and potential for higher rentals," he said.
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The top five property markets in 2014 are Japan's Tokyo, China's Shanghai, Indonesia's Jakarta, Philippines' Manila and Australia's Sydney, PwC found.
PwC said a huge spike in demand for Japanese property had propelled Tokyo to the top spot, following a five-year absence from the top rankings. The sudden increase in popularity is due to the government's radical economic stimulus plan, which has resulted in a flurry of purchases in anticipation of higher prices, PwC said.
As well as Tokyo, secondary cities in Japan, including Osaka, Fukuoka and Sapporo are also proving popular.
Shanghai was the second most popular market, despite suffering from both capitalization rate compression and stagnant real growth. International investors are still attracted to the market due to the perception of it as a well-known, low-risk market for those who are unwilling to venture to less-known cities.
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"Shanghai offers a level of comfort to funds with a mandate to place money in China," read the report.
Meanwhile, interest in Jakarta and Manila, which were ranked third and fourth respectively, also jumped. The surge in demand was down to expectations for higher interest rates leading investors to markets than can provide the kind of returns they are unable to tap elsewhere.
The report said Manila is likely to surprise in the near future due to its fast growing economy and the increased attention the city is getting from multinationals. Problems over a lack of transparency and governance issues have improved, while a young demographic and strong capital inflows from local citizens working overseas has also provided a boost.
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Finally Australia's capital city continues to be popular among both local and foreign institutional investors despite relatively weak fundamentals in its office and retail sector and concerns over the financial and mining sectors. With limited supply of office space in the pipeline, investors are bullish about the city's central business district and its residential sector has seen a solid rebound.
The PwC report released Thursday interviewed 250 real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
— By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie