Overbuilding in Singapore's luxury homes sector spurred a flurry of doomsday scenarios, but prices may have already hit bottom, with buyers beginning to nibble.
"We are seeing a number of our clients coming back very seriously this time around," said Chandran V R, managing director at property agent CRE. "We are currently serving buyers in the market for luxury apartments. A lot of them are very ready to make a move because they feel buying has corrected and if they wait too long, the market can take off."
He noted that over the past couple months, there have been several big property deals, including the 51 million Singapore dollars ($37.9 million) paid for the penthouse at the Le Nouvel Ardmore development, a potential record for a penthouse in the city-state.
The interest is primarily among ultra-high net worth clients for apartments over 3,000 square feet, penthouses and good quality bungalows, Chandran said.
Analysts believe luxury home prices are at their nadir, although the same might not be true of mass-market properties.
"We have turned more positive on the high-end residential market as prices in this segment have fallen by 24 percent from their peak vs. a 6 percent decline for the overall market," Tricia Song, Asia ex-Japan real estate analyst at Barclays, said in a note Monday. "Price corrections have attracted buyers back to this segment."
Sales in Singapore's tony "core central region" jumped 73 percent in May from April, she noted, with units priced over 2,000 Singapore dollars per square foot seeing a sales increase.
It's not all good news for luxury developers. She noted that the Cluny Park Residence development sold three units last month at 2,620 Singapore dollars a square foot, but that's down 16 percent from August 2013. The 52-unit project is still only around 44 percent sold, Song noted.
But Song isn't alone in largely expecting high-end property demand to have a sunnier outlook.
After the announcement of planned government land sales for the second half of this year contained no sites in the central region, "the current surplus at the high end of the market will ease. This is our preferred market segment," Derrick Heng, a property analyst at Maybank KimEng, said in a note last week.
The luxury end of the market is also the most likely to benefit if Singapore rolls back some of the cooling measures imposed to rein in sharp price increases, particularly the Additional Buyer's Stamp Duty (ABSD), analysts said. The ABSD tacks on as much as an additional 15 percent to the purchase price for foreign buyers and Singaporeans with more than one property.
While that might not seem terribly onerous for buyers at the high end, it appears to have successfully dampened interest in luxury properties in the city-state.
"Rich buyers, indeed, can afford to pay ABSD, but they don't want to pay 15 percent above local buyers. That is a figure too high to over-pay for the same property," Alexander Karolik Shlaen, an economist and CEO of Panache Management, a luxury brands and real estate investment advisor, said via email. "Local Investors also shun Singapore high end residential property as they are concerned that foreigners lost interest in this segment."
While Shlaen believes high-end prices have bottomed, and even describes them as a "world class bargain" compared with other cities such as Hong Kong, he doesn't expect a recovery until some cooling measures are rolled back.
Indeed, CRE's Chandran noted that much of the interest in luxury properties is coming from clients in countries that aren't subject to the ABSD, such as the U.S. and Switzerland.
Analysts are also pointing to another reason the government may roll back some of its cooling measures: fears prices may fall too much.
"It is likely that elections could be called in end-2015, timed to coincide with the conclusion of the nation's 50th anniversary," analysts at UOB KayHian said in a note Tuesday. "Singapore has among the world's highest home ownership rates at over 90% and a drastic correction may result in alienating its voter base. We believe the government will likely start with easing of the onerous transaction charges (buyers stamp duty and sellers stamp duty)."
Note: This story has been updated to include comments from Alexander Karolik Shlaen, CEO of Panache.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1