An "up cycle" for Singapore property may last into 2020, Morgan Stanley said, with estimates that home prices will climb by as much as 8 per cent next year.
Mr Wilson Ng, a property analyst at Morgan Stanley, said developers' valuations are attractive based on discounts to net asset value and price-to-book ratios.
He has "overweight" ratings on CapitaLand and City Developments (CDL).
Fund managers and analysts say that Singapore property firms may see an extended share rally into 2018 on a reviving home market.
After double-digit gains this year, Morgan Stanley sees a 42 per cent jump in shares of CapitaLand, and a 24 per cent increase in CDL in the next 12 months.
Property companies such as CDL and UOL Group are among the top performers in Singapore this year, with developers collectively on track for their best annual performance in five years.
Signs of a revival in Singapore's property market include record prices paid for land deals, the first increase in home prices in four years, and the first gain in office rents in 2 1/2 years.
The buoyant sentiment has been tempered by the Monetary Authority of Singapore, which recently flagged the risk of rising vacancies amid slowing population growth.
The risk of housing oversupply may not be imminent because of the lead time needed to complete property projects.
With the Government only recently starting to increase the supply of land, the resulting developments will not hit the market before 2020, said Mr Raj Vaswani, a director of the Tolaram family office in Singapore, which manages US$500 million (S$676 million).
The firm owns shares in Singapore-listed developers Guocoland, Frasers Centrepoint and CapitaLand.
Not everyone is bullish on Singapore's housing market. Mr Nicholas Teo, trading strategist at KGI Securities (Singapore), said many factors will weigh on a sustainable rally in home prices, including rising vacancy rates, weakness in rental demand and the prospect of rising global interest rates.
In addition, Singapore still has some stringent home purchase restrictions in place that limit the possibility of runaway home prices.