Cash premiums for resale Housing Board flats hit a four-year low last month.
The median cash-over-valuation (COV) was $5,000 in December, down from $8,000 in November, according to Singapore Real Estate Exchange (SRX) flash estimates yesterday.
Resale prices and volumes also slid, capping a quarter in which median valuation dipped for the first time since 2009.
December's COV was the lowest since June 2009. The drop came on the back of transactions in which flats went for less than their valuation. These accounted for about one in five of all deals - the highest proportion since May 2009.
The towns with the most of such deals were Woodlands, Sengkang and Jurong West. In Sengkang and Punggol, more than half of transactions closed below valuation.
Experts predict the fall will continue. PropNex Realty chief executive officer Mohamed Ismail Gafoor said: "We are expecting COVs to continue to moderate, especially over the festive period."
But flats in good locations should still fetch "reasonable premiums", he added.
R'ST Research director Ong Kah Seng thinks the median COV could hit zero by the end of the first quarter, with offering a flat at its valuation price becoming a "given thing".
Resale prices themselves continued to slide. The resale index fell 0.5 per cent in December to 145.9 points, the lowest level since July 2012.
Fewer flats changed hands last month, with an estimated 908 HDB resale deals, down from 1,004 in November.
In the rental market, volume stayed flat with about 1,364 flats rented. But prices slipped for the second month in a row, down 2.1 per cent to $2,300.
Overall, December completed a lacklustre quarter.
According to SRX data, HDB median valuation prices in the last quarter of 2013 fell by $3,000 to $435,000 - the first quarterly drop since late 2009.
ERA Realty key executive officer Eugene Lim said the continued slowdown was expected.
He pointed to tighter home loan rules, more Build-To-Order flats, restrictions on permanent resident buyers, and new flats being made available to singles.
Both ERA and PropNex predict resale prices will fall by 5 per cent to 8 per cent for the whole year.
But as prices and COVs fall, activity may pick up, said experts.
For instance, zero COVs "will start to encourage buyers to get a resale flat, as it seems more affordable without a 'hard cash' component," said Mr Ong.
Market recovery or stability may come in the middle of the year, when economic activity and property sentiments tend to be higher.
Mr Lim expects about 8 per cent to 10 per cent more transactions this year, compared to 2013.