Singapore's property prices may have largely defied doomsday predictions for a crash, but investors appear reluctant to step back into the market anytime soon.
"Singaporeans continue to see property as a key investment," Sean Tan, a general manager for Singapore at iProperty.com, said in a statement with the results of the real estate website's market sentiment survey.
But while 29 percent cited rental income as a reason to buy, analysts are concerned about whether tenants and rents may be drying up.
"It has become increasingly difficult to rent out units as the increased completions and slower influx of foreigners is resulting in rising vacancies," analysts at UOB-KayHian said in a note Monday, citing an 8.5 percent vacancy rate for condo and apartment units. Based on government data, the vacancy rate was around 7.8 percent at the end of 2014, the highest since the end of 2005.
Additionally, the sharp jump in local mortgage rates is shaving landlords' returns, UOB KayHian said. Sibor, or the Singapore interbank offered rate, used as the basis for setting mortgage and other loans, has more than doubled to over 1.0 percent from 0.4 percent over the past four months, it noted.