PropNex CEO ‘very excited’ about the Singapore real estate market in 2025

While that may be good news for Singaporeans looking for a new place to live, it makes things more difficult for the city’s real estate companies and property developers, some of whom which reported a sharp drop in revenue. profit as the Singapore government tries to control the market.

Singapore officials describe their so-called cooling measures as a way to swing the market back towards homeowners and “cool demand” from domestic and foreign investors for real estate city ​​housing.

“If we do not take preventative measures soon, we could see the number of investments by both locals and foreigners increase, and that will put additional stress on Singaporeans who are Looking to buy residential real estate mainly to own it,” said Desmond Lee, a Singaporean expert. Minister of National Development, told reporters in April 2023, following the government’s most recent cooling measure.

However, the market is still hot enough for PropNex, a real estate company with no qualified real estate development activities, to be included in the list. Luck‘S opening The Southeast Asia 500 list, which ranks the region’s largest companies by revenue.

Singapore-based PropNex, the only real estate broker on the list, generates the majority of its revenue from commissions collected by its team of real estate agents. According to the company’s annual report, PropNex handled 63% of Singapore’s real estate sales last year. (Singapore government aggregated data shows the total number of transactions and value of real estate transactions at about 48,500 and 45.7 billion USD, respectively). This real estate brokerage generated $624 million in revenue in 2023, enough to rank it at number 395.

“We did very well,” said PropNex CEO Ismail Gafoor, noting that the company had record market share last year.

PropNex’s revenue fell compared to 2021 and 2022, the peak of Singapore’s recent real estate boom. Like many other cities, house prices in Singapore skyrocketed as stay-at-home families reassessed their living conditions. Housing supply is also limited as the pandemic disrupts construction progress.

The influx of new migrants to relatively more open Singapore (which lowered Covid measures earlier than many other economies in Asia) has also helped boost private home prices.

“When people don’t travel for a year or two, they have more savings. And as they are forced to work from home, many people realize that perhaps their current home is not the ideal home,” Gafoor said.

The mood in the real estate world turned sour last year. Gafoor blamed higher interest rates, continuing concerns about the Ukraine conflict and, importantly, Singapore’s asset cooling measures.

But Gafoor is optimistic that the Singapore real estate market will quickly recover. “This year will probably be similar to last year, maybe a little better. But we are excited to move forward into 2025 and beyond,” he said.

What is PropNex?

Gafoor became interested in real estate during his time as a full-time soldier in the Singapore army. In his free time, he and his wife – also a soldier – visit open houses to learn more about the market. The two founded their own real estate company, Nooris Consultants, in 1996 after Gafoor worked for 13 years.

In 2000, Gafoor partnered with three other real estate companies. to establish PropNex. The company started by helping Singaporeans sell their public housing flats—known locally as “HDB” flats, after the city’s Housing Development Board—before expanding into private property and corporate leasing sectors.

PropNex is currently the largest listed real estate company in the country, after debuting on the Singapore stock exchange in 2018. PropNex’s 12,000 agents account for one-third of the total number of registered agents in Singapore.

The majority of PropNex’s revenue comes from Singapore, but the company has plans to expand internationally. Its overseas presence currently includes Indonesia, Malaysia, Vietnam, Cambodia and Australia.

What’s happening with the Singapore real estate market?

Singapore has a home ownership rate of most of 90%. That’s partly due to government policy, which has long viewed home ownership as key to nation-building.

Public housing accounts for the majority of Singapore’s housing assets. About 72% of Singapore’s 1.5 million homes are HDB-owned, estimates Leonard Tay, head of Singapore research at Knight Frank, a global real estate consultancy. Singapore supports people in need of buying public housing: Currently, more than 80% of Singapore residents live in houses are built by the government, the rest live in residential areas built by the private sector.

The concept of “public housing” sometimes gets a bad rap in some other housing markets. However, in Singapore, public housing is well-built, well-maintained and highly sought after, with some apartments sell for more than 1 million Singapore dollars (739,000 USD) on the open market.

Tay said these sales prices could give sellers “financial gunpowder” to move into private sector housing. Due to lower supply, these homes tend to cost more than those built by HDB.

Gafoor noted that a large portion of PropNex’s revenue comes from the HDB market, which is less affected by Singapore government policy. cooling measures. Commissions from public housing resales accounted for 18% of PropNex’s 2023 revenue, up from 15% the year before. Real estate agents’ share of the rental market also increased to 22% by 2023, up from 17%.

However, private real estate sales and related activities generated 56% of PropNex’s revenue in 2023. This sector is much more vulnerable to government measures to reduce growth price.

Singapore has been trying to rein in the real estate market since late 2022. For example, it forced private home owners under 55 years old to wait 15 months from selling the house to moving into public housing.

The waiting period takes aim at the practice of some Singaporeans trying to take advantage of the price differential between private sector and public housing. Private landlords can sell their private properties, buy HDB flats on the open market and pocket the difference. Singapore speak The waiting period will prioritize public housing for Singaporeans with more urgent needs.

But despite the impact on its sales, Gafoor thinks Singapore’s cooling measures are a good thing.

These restrictions ensure that only “genuine buyers enter the market with the desire to hold, maintain and grow,” he said, which means property prices remain more flexible in these circumstances. unforeseen circumstances”.

Gafoor said rampant speculation means real estate prices will “go high and low”. “That doesn’t provide stability for investors.”