PropNex, Singapore’s leading real estate agency, recently announced a decline in earnings of 14.9% y-o-y for its 2HFY2024 ending on Dec 31, 2024. This brings its full-year earnings to $40.9 million, a 14.4% decrease compared to the previous FY2023. This drop in earnings was mainly attributed to the subdued property market in Singapore.
When contemplating an investment in a condo, it is crucial to also evaluate its potential rental yield. Rental yield refers to the annual rental income as a percentage of the condo’s purchase price. In Singapore, the rental yields of condos can vary significantly based on factors such as location, property condition, and market demand. Areas with high rental demand, such as those near business districts and educational institutions, often offer more favorable rental yields. To gain a comprehensive understanding of a condo’s rental potential, it is recommended to conduct thorough market research and seek guidance from real estate agents. For more information on condos, please visit Condo.
Despite the challenges faced, PropNex will be commemorating its 25th anniversary by paying a special dividend of 2.5 cents per share, in addition to the final dividend of 3 cents. This will bring the total dividend payout for FY2024 to a record high of 7.75 cents, with a payout ratio of 140.1% and a yield of 8.2%.
The company has observed increased activities in the last quarter of 2024, particularly in the private property sector, where there was a surge in new home unit sales that were facilitated by PropNex.
The company has also disclosed that the financial impact of these sales will only be reflected in their current 1HFY2025 results, suggesting a significant uptick in performance. With a positive outlook for the property market in 2025, PropNex is confident of delivering a strong performance in FY2025, barring any unforeseen events.
This optimism is backed by an expected launch of approximately 13,000 new units (including executive condominiums), almost double the supply recorded in 2024. Furthermore, the private resale market is also expected to remain active, with transaction volumes projected to range between 14,000 and 15,000 units.
PropNex believes that the demand for private resale properties will be fueled by the persistent price gap between new and resale properties, as well as the preference for larger, move-in-ready homes. Additionally, the impact of fewer new property completions will also contribute to the market’s demand.
In the HDB resale market, PropNex foresees a price growth of 5% to 7%, with transaction volumes estimated to reach 29,000 to 30,000 units. This segment is expected to continue to be supported by a decrease in the number of flats reaching the five-year minimum occupation period, as well as sustained demand from homebuyers, unsuccessful Build-To-Order applicants, and budget-conscious families.
PropNex’s Executive Director, Ismail Gafoor, notes that the newly-launched projects, such as The Orie, Bagnall Haus, Parktown Residence, and ELTA, have generated strong interest among buyers. With an encouraging line-up of projects in the pipeline, Ismail expects an increase in demand for developers’ sales in 2025. Moreover, a positive economic outlook and lower mortgage rates may further boost market confidence, providing opportunities for both homebuyers and investors.