Singapore's property investors got a yellow card from the city-state's central bank in its annual financial stability review.
"Before investing in property, investors should be aware that rising vacancy rates, declining rentals and impending interest rate increases mean that they may not always be able to rely on rental income to service their investment property loans," said the review, published by the Monetary Authority of Singapore (MAS) on Tuesday.
There's been some signs of a sales pickup in Singapore's property market, with the number of new homes sold rising to 1,252 in October, from 509 in September, the highest number of sales since July 2015.
But prices haven't followed suit, with private residential property prices dropping 1.5 percent on-quarter in the third quarter, according to government data, marking 12 straight quarters of declines and the largest on-quarter drop since 2009 during the global financial crisis.
Vacancy rates have also remained high amid increases in housing supply, running at 8.7 percent in the third quarter, down slightly from 8.9 percent in the second quarter, but still hovering around levels last seen in 2000, amid the aftermath of the Asian Financial Crisis.
"MAS remains vigilant to the risk that demand-supply dynamics could weigh on the property market outlook amid rising vacancy rates and softer economic and labour market conditions," it said.
But it also pointed to upside risks for the market.
"Transaction activity has held firm, perhaps buoyed by the low interest rate environment and better matching of price expectations between buyers and sellers. Resale activity has increased and take-up at some newly-launched projects has been strong," the MAS said.
"The upside risk that current low global interest rates could spur further demand in the market cannot be discounted."
It noted that the series of cooling measures implemented by the government since 2011 has improved the risk profile of housing loans and encouraged financial prudence.
It expected that the banking system would be resilient to a sharp fall in property prices, with loan-to-value ratios of housing loans coming down from 77 percent in the second quarter of 2010 to 60 percent in the third quarter of this year.
But it cautioned, "repayment risks remain for a small group of borrowers amid the weaker economic outlook. The share of mortgage loans that were more than 30 days in arrears increased to close to 1.0 percent in September 2016, up from 0.9 percent a year ago."
The MAS noted that overseas property transactions by Singapore households continued to moderate in the first half of 2016, with the value falling to 200 million Singapore dollars ($140.4 million) from 1.1 billion Singapore dollars in the first half of 2014.
Properties in the U.K., Australia and Malaysia made up 80 percent of the value in 2016's first half, while the Philippines, Cambodia and Vietnam comprised 11 percent.
"Currency fluctuations and shifting monetary policies in foreign economies could also affect the cost of debt obligations and rental returns for overseas properties. It is important for households to make investment decisions prudently and with a longer-term perspective," the MAS cautioned.
The MAS was cautious about Singaporeans' home purchases, particularly as it would affect retirement savings amid a swiftly aging population. Around one in four Singaporeans will be 65 years old or older by 2030, it noted.
"There is a trade-off between housing consumption and retirement savings. The more savings are used for housing consumption, the less households will have for their retirement," it said.
While the central bank noted that concerns about property bubbles and their impact on financial stability usually focus on residential markets, it also expressed concern over commercial real estate.
The MAS noted that global commercial real estate (CRE) investment has more than tripled since the Global Financial Crisis, rising to US$670 billion in 2015, from $190 billion in 2009. In Asia, it has risen to near $100 billion in 2015 from $50 billion in 2009, it said.
The MAS said one reason for the increased investor interest was that relative returns on CRE were higher amid the global low interest-rate environment, particularly among yield seekers.
But it was cautious.
"Increased CRE investment in Asia has, however, led to CRE prices rising faster than rentals in many markets," it said. "Should the trend persist, CRE markets could be at risk of becoming misaligned with economic fundamentals."
The MAS said it needed to monitor developments in the CRE market to detect risks early, particularly as regional and global economic headwinds could weigh on Asia's commercial property.
"CRE markets are relatively opaque compared to residential real estate markets, and official data on CRE markets are often not readily available," it noted.
For Singapore-listed real-estate investment trusts (S-REITs), the MAS was generally sanguine on their ability to withstand rising interest rates ahead, but cautioned about potential payouts.
It noted that the sector was resilient, with healthy interest coverage ratios and improved debt maturity profiles.
"Stress tests on S-REITs with significant office, industrial and retail exposures in Singapore suggest that they remain well-placed to meet their debt obligations when exposed to a confluence of risk factors," it said.
"Nonetheless, the current macroeconomic headwinds and the peak in completions of new office, industrial and retail properties between 2016 and 2018 could pose some risks to maintaining dividend payouts while still meeting debt service obligations," it said.
"Investors should therefore exercise caution in their search for yield in the current low interest rate environment."
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter