The global financial crisis and an economic recession are deterring buyers in the country, experts believe.
Property prices have retreated for two straight quarters after a four year real estate boom, the data from the Urban Redevelopment Authority shows. A spokesman confirmed it was the biggest fall since 1998.
Prices for apartments in the core central area fell 6.3%, dropped 5.5% in the rest of the centre and 4.7% across other parts of the country, the government agency figures also showed.
Officials are now predicting that Singapore's economy cold shrink by 2% this year, the first contraction since 2001 as the global financial crisis hits.
'The number of transactions has dropped dramatically. Those who want to sell would need to do so at a fairly distressed price and buyers would only be willing to purchase at a fairly attractive price,' said Ong Choon Fah, regional head of research at DTZ a property consulting firm in Singapore.
There are no signs of immediate improvement in 2009. 'We certainly expect the first quarter to remain slow,' he added.
Singapore's second-largest real estate company, City Developments Ltd, has announced it will delay selling homes at new residential projects 'for the time being' amid the weakening property market and global slowdown.
'Developers in general have not made very significant changes to their prices and there's the view that some of them are waiting to ride out the slowdown,' added DTZ's Ong.
Further figures from the Urban Redevelopment Authority show that about 10,450 unfinished homes were sold under a deferred mortgage plan that allowed buyers to postpone taking out loans equivalent to as much as 90% of the property values until they were completed.
Some of those homes may be at risk of default or so-called distressed sales if prices decline further, analysts are warning.
