Singapore's home prices could fall more than expected this year and unwinding cooling measures may not staunch any damage, Nomura said.
Most analysts already expect the city-state's private home prices to decline, forecasting a peak-to-trough correction of around 10 to 15 percent through 2016, with a drop of around 5 percent this year, Min Chow Sai, an analyst at Nomura, said in a note.
But he thinks 2014's pace of decline could surprise, potentially falling more than 10 percent by the end of the year.
(Read more: Is Singapore set for an Icelandic-style crash?)
"A potential source of this negative surprise is a weaker-than-expected secondary market," Chow Sai said, noting more sellers appear willing to pay the sellers' stamp duty (SSD) and more appear willing to sell at a net loss. The SSD is imposed on properties purchased after February 10, 2010 and owned for less than four years.
In addition, with around 10,000 units of private homes completed in 2013 having limited or no SSD restriction, a potential increase in secondary supply is looming, he said.
Another bucket of cold water on the private housing market may come from the public housing resale market, he said. Nomura estimates public housing resale prices may need to fall more than 20 percent for the affordability level to reach a typical market bottom.
"A correction of 21.3 percent in HDB (public housing) resale prices will significantly reduce upgraders' demand for the mass-market private housing market and could precipitate a faster price decline," he said.
The market is already showing signs of stress. In December, developers' sales of private homes fell more than 80 percent from a year earlier, with only 259 units changing hands, according to government data. In addition, last week private home prices in the city-state registered their first drop in seven quarters in the October-December period, falling 0.8 percent on-quarter.
Any government efforts to stem the declines by rolling back cooling measures on the segment may be ineffective, Chow Sai said.
(Read more: When will Singapore roll back property curbs?)
"A potential surprise in 2014 could be the loosening of some cooling measures, which then proves to be insufficient in addressing the fall in home prices," he said.
"Certain policy changes introduced over the last few years with respect to the public housing market and prudent financing are structural in nature (i.e. these policies are not likely to be relaxed)," he said, implying public housing resale values will remain a key negative for the market, even if other measures, such as stamp duties, were relaxed.
In June last year, the government introduced rules to ensure a buyer's monthly payments do not exceed 60 percent of income, a move designed to ensure buyers are not caught out by a spike in interest rates.
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But despite the struggles at the lower end of the market, prime luxury properties appear set to finally catch a break, Nomura said.
"The prime luxury segment is likely to benefit the most from any policy relaxation," the note said. "At the very least, this segment should be the least affected by the potential weaker-than-expected HDB resale/upgraders' market."
In addition, the luxury segment already appears to be seeing some pickup, with 47 units of non-landed homes priced over 5 million Singapore dollars, or around $3.9 million, changed hands in the primary market, the largest number since higher stamp duties were introduced in January 2013.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1