It is the second straight month of decline, after resale prices fell by 1% in December.
The SRPI for January showed that resale prices for private homes in the central area fell 1.9% while prices of small units dropped by 1%.
Meanwhile, prices of resale units outside the central area climbed 1% in January.
Releasing the data, the Institute of Real Estate Studies says the Additional Buyer's Stamp Duty announced by the government on December 7 has had some impact on home prices.
For the next few months, industry players said prices for resale private properties are likely to soften slightly.
They say transaction volume in the secondary market has been slowing since last year.
Donald Han, Special Advisor at HSR Property Group said, "Transactions for resale non-landed private homes fell from 24,000 in 2010 to 16,000 in 2011. Moving into the first quarter of 2012, in terms of transaction volume, the bulk of the activity is likely to be dominated by new units."
According to the Urban Redevelopment Authority, 1,872 units of new homes were sold last month.
The strong sales for January was driven by mass market projects like Watertown, The Hillier and Parc Rosewood.
Mr Han added, "More home buyers are now looking at the primary market, they are drawn by the appeal of newer developments as well as discounts offered by developers for example. People have more confidence in the market in the mid to long term, and they feel that by the time the units are completed, perhaps they could see an appreciation in value."
Despite the slower sales in the resale private property market, analysts say prices will not fall drastically.
Mr Ong Teck Hui, Head of Research and Consultancy at Credo Real Estate said, "I don't think we will see big price cuts if the economic conditions do not deteriorate badly. For the first quarter, we expect overall resale prices for private homes to remain flat or just marginally negative."
Source: Channel News Asia