Singapore's property cooling measures may have impacted home sales, which have plummeted in the Southeast Asian city-state, but analysts say don't expect prices to follow suit.
Private property sales in the primary market
And, double-digit declines are expected to continue into 2013. Real estate analysts forecast transaction volumes will fall close to 30 percent next year to 16,000 units, down from 22,000 in 2012.
Despite this, experts forecast prices to stay flat or even trend higher in the coming year, as cash-rich real estate developers remain firm on prices in the face of rising land costs.
"Cooling measures will effect volumes; we won't see the 22,000 units repeated next year. But, that's not going to impact prices – developers have made a cash buffer in the last 24 months, so they don't feel the need to reduce prices," Donald Han, senior advisor at HSR Property Consultants, told CNBC.
Han forecasts private home prices – which hit a record high in the third quarter - will rise around 1 percent in the New Year.
With land prices rising, translating into higher input costs for developers, Alan Cheong, head of research, Singapore, at real estate services firm Savills, sees prices moving much higher next year, up to 10 percent in the "mass market." The mass market is categorized by private apartments priced in the S$850 ($690) to 1,200 per square foot range.
Land prices in Tanah Merah, a residential area located on the eastern part of the island, for example, have risen 48 percent between February and October, according to data from Savills. Land in Singapore is sold through government tenders and auctions, to the highest bidder.
"With average costs moving up, prices will move up. Developers can't be expected to do charity," Cheong added.
Cheong added that a fall in transaction volumes will not dent prices, because the decline in sales will be driven by lesser supply – as a result of fewer development launches next year - not falling demand.
He expects the supply of new units to be lower in 2013, than 2012, given the current pace of the government's land sales program.
"Owing to the lack of new product offerings, this will lower demand in 2013," he said.
According to Han of HSR Property Consultants, the resale property market will also remain resilient next year, as high prices on the primary market keep overall prices elevated. Properties in the re-sale market typically fetch 10-20 percent lower than fresh launches.
In addition, Han said demand for these homes may rise as a result of the recent property tightening measures, the latest being a move in October to cap the amount of time granted to homebuyers to repay loans on new residential property at 35 years.
"Buyers are saying they may not be able to afford brand new, so they are going for resale market," Han said. "The gap between resale and primary properties will narrow."
While Singapore has introduced a slew of measures to keep a lid on property prices, economists remain skeptical on how effective they will be, particularly in the face of high liquidity and low financing costs, which continue to make real estate an attractive investment.
In addition, the property market is being well supported by the rapid increase in the price of government housing or Housing Development Board (HDB) apartments, which is enabling Singaporeans who own a government-built apartment to upgrade to a private property. Eighty-five percent of Singaporeans own an HDB flat, according to HSR Property Consultants.
What Can Bring Prices Down?
Experts said there are only two scenarios that will cause the steady rise in real estate prices to reverse its trend: a "huge" correction in the stock market, or higher interest rates.
Interest rates in Singapore, known as the Singapore Inter-bank Offered Rate (SIBOR), tend to track the United States Federal Reserve's funds rate, which is expected to remain near zero until 2015.
By CNBC's Ansuya Harjani