Prices of luxury homes in Singapore fell 10 per cent in the 12 months to the end of September - the worst performance in its category across 33 cities surveyed by property consultants Knight Frank.
In the third quarter of this year, prices of such properties here dropped 4.1 per cent, according to Knight Frank's Prime Global Cities Index, released on Thursday.
Knight Frank Singapore's director & head of research, Alice Tan, said: "The muted sentiment in Singapore's luxury residential market remains inherent with falling transaction volumes, and buyers are anticipating further price adjustments."
"Some owners are lowering their asking prices in light of market weakness, while majority of owners are holding out given the exclusivity of their property assets and their confidence in Singapore's long-term prospects."
She said sales were likely to be thin in the fourth quarter given the year-end holiday season, with average prices "potentially moderating by about 3 to 5 per cent on a quarterly basis."
Tokyo recorded the strongest quarterly growth of 9.2 per cent in the survey, ahead of Cape Town with 6.2 per cent.
Jakarta saw the strongest annual rise in luxury prices, with prices advancing 27 per cent in the year to June (latest data). But the market there has cooled considerably, with prices rising by only 2.5 per cent in the first half of this year.
Overall in the 33 cities, prices of prime residential property increased by just 0.2 per cent in the third quarter of 2014, its weakest performance in two years. They rose by 4 per cent over a 12-month period, down from 6.6 per cent a year earlier.
Knight Frank said the reason for the cooler luxury market in the third quarter was partly seasonal: for much of the world, it is the summer holiday season which often sees slower sales activity reducing the pressure on prices.
But it added that these key political and economic events likely contributed to the slowdown: the prospect of tightening monetary policy in the US, the approaching general Election in the UK (including ongoing discussions of a mansion tax), the persistence of cooling measures in key Asian cities and, perhaps most pivotal, a new set of negative economic indicators emanating from Europe.