Singapore’s housing market, which was hot just a few years ago, is cooling down. Private sector real estate prices Hop it 6.8% in 2023, slower than the 8.6% recorded in the previous year. Resale prices for the city’s world-class public housing are also moderate, Just jump 4.8% in 2023, compared to 10.4% in 2022.
While this may be good news for Singaporeans looking for a new place to live, it has been more difficult for the city’s property companies and property developers, many of whom have reported sharp declines in property prices. he won Where the Singaporean government tried to control the market.
Singaporean officials described what they called the cooling measures as a way to redirect the market towards residential owners and “alleviate demand” from local and foreign investors for residential properties in the city.
Desmond Lee, President of Singapore, said: “If we do not take early preventive measures, we may see a growth in investment numbers by locals and foreigners, and this will increase the pressure on Singaporeans looking to buy residential properties mainly for owner-occupation.” Minister of National Development, He told reporters In April 2023, after the latest calming measures taken by the government.
However, the market was still hot enough to qualify PropNex, a real estate company that does not have its own real estate development projects. luckThe inaugural Southeast Asia 500 list, which ranks the region’s largest companies by revenue.
Singapore-based PropNex, the only real estate company on the list, generates most of its revenue from commissions collected by its army of real estate agents. PropNex handled 63% of property sales in Singapore last year, according to the company’s annual report. (A Singapore government dataset estimates the total number of transactions and value of property sales at $48,500 and $45.7 billion, respectively.) The real estate broker generated $624 million in revenue in 2023, enough to place it at No. 395.
“We have done exceptionally well,” says Ismail Ghafoor, CEO of PropNex, noting that the company gained record market share last year.
PropNex’s revenues declined compared to 2021 and 2022, the peak of Singapore’s recent property boom. Like many cities, house prices in Singapore have risen as families stuck at home reevaluate their living conditions. Housing supply was also constrained as the pandemic disrupted construction timelines.
The influx of new immigrants flocking to relatively more open Singapore (which reduced anti-coronavirus measures earlier than many other economies in Asia) has also helped boost private housing prices.
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“When people didn’t travel for a year or two, they had a lot of savings. When they had to work from home, a lot of people realized that maybe their current home wasn’t the ideal home,” says Ghafoor.
The mood in real estate circles soured last year. Ghafoor blames rising interest rates, continued concerns about the conflict in Ukraine and, most importantly, property cooling measures in Singapore.
But Ghafoor is optimistic that Singapore’s property market will rebound quickly. “This year should be about the same as last year, maybe a little better,” he added. “But we are very excited to move forward into 2025 and beyond.”
What is Propinx?
Ghafoor began taking an interest in real estate during his stint as a full-time soldier in the Singapore Army. During his free time, he and his wife — also a member of the military — visited open houses to learn more about the market. The two founded their own real estate company, Norris Consulting, in 1996 after Ghafoor reached his 13th year of service.
In 2000, Ghafoor entered into a partnership with three other real estate companies To set up Bronx. The company began by helping Singaporeans sell their public housing flats – known locally as “HDB” flats, after the city’s Housing Development Board – before expanding to private properties and corporate rentals.
PropNex is now the country’s largest listed estate agency, after debuting on the Singapore Stock Exchange in 2018. PropNex’s 12,000 agents make up a third of all registered agents in Singapore.
Most of PropNex’s revenue comes from Singapore, but the agency has plans to expand internationally. Its overseas presence now includes Indonesia, Malaysia, Vietnam, Cambodia and Australia.
What’s going on with the property market in Singapore?
Singapore has a high home ownership rate barely 90%. This is partly due to government policy, which has long portrayed homeownership as key to nation building.
Public housing makes up most of Singapore’s residential properties. About 72% of the 1.5 million homes in Singapore are HDB-owned, estimates Leonard Tay, head of Singapore research at Knight Frank, a global property consultancy. Singapore offers support to those wishing to purchase public housing: now more than 80% of Singapore’s population lives in houses built by the government, while the rest live in housing built by the private sector.
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The concept of “public housing” sometimes has a bad reputation in many other housing markets. However, public houses in Singapore are well built, well maintained, and in high demand, with some apartments Sell to More than S$1 million ($739,000) is on the open market.
These sale prices could give sellers the “financial gunpowder” to move into private sector housing, Tay says. Due to low supply, these homes tend to command a premium compared to their HDB-built counterparts.
Ghafoor points out that a large portion of PropNex’s revenue comes from the HDB market, which is less vulnerable to Singaporean government policies. Cooling measures. Commissions from public housing resales accounted for 18% of PropNex’s 2023 revenue, up from 15% the previous year. Real estate agencies’ share of the rental market also rose to 22% in 2023, up from 17%.
However, private real estate sales and related activities generated 56% of PropNex’s revenue in 2023. This sector is more vulnerable to government measures to reduce price increases.
Singapore has tried to restrict the property market since late 2022. For example, it has forced private homeowners under the age of 55 to Waiting\in waiting 15 months between selling their home and moving into public housing.
The waiting period targets a common practice among some Singaporeans who try to take advantage of the price difference between private and public housing. Private homeowners can sell their private property, buy condominium housing on the open market, and get the difference. Singapore He says The waiting period will prioritize public housing for Singaporeans with the most urgent needs.
But despite the hit to his sales, Ghafoor believes Singapore’s cooling measures are a good thing.
He says these restrictions ensure that “only genuine buyers enter the market with a desire to hold and grow, meaning property prices remain more resilient amid unforeseen circumstances.”
Rampant speculation means property prices will “go high and low,” Ghafoor says. “This does not give stability to investors.”
