Following the Singapore government's repeated efforts to rein in home prices, the city state's residential market will come under further pressure, said Lim Ming Yan, CEO of CapitaLand – Southeast Asia's largest developer.

"In the short term, with all the policy measures we see the residential market to be under a bit more challenges, but otherwise it's still a good market for us to be in," said Lim told CNBC on Wednesday.

(Read more: Singapore 2014 budget: Who will be the winners?)

Cracks have already begun to show up in the city's residential real estate market, with private home prices declining 0.9 percent on quarter in the fourth quarter – the first price decline in seven quarters.

And market watchers expect the trend to continue, with Piyush Gupta, CEO of the region's largest bank, DBS, forecasting a 10-15 percent drop in prices this year, according to local media reports.

Munshi Ahmed | Bloomberg | Getty Images

Nevertheless, Singapore will be the key focus market for the developer, said Lim, in addition to China and Vietnam.

"We still like the fundamentals of Singapore as being in the center of Southeast Asia. So long as Southeast Asia continues to do well, there will always be a role for Singapore to play," he said.

Despite a slowdown in China's economic growth, urbanization will continue to support the country's property market, Lim said.

Meanwhile, the developer is paying more attention to Vietnam, where there has been a notable improvement in investor sentiment, he said.

(Read more: Higher wealth taxes on the cards for Singapore?)

"We've done a lot more sales in 2013 compared with 2012. We'd be open to increasing our position in Vietnam," he said.

The developer reported a 46 percent decline in fourth quarter net profit on Wednesday due largely to one-off losses from a partial divestment of its stake in Australian property group Australand and slower sales of some Singapore residential projects.

It posted a net profit of 142.9 million Singapore dollars (US$113.3 million) in the three months ended December, down from S$262.7 million.

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