When it comes to investing in a Singapore condo, one of the most crucial factors to consider is financing. Fortunately, there are various mortgage options available in Singapore. However, it is essential for investors to have a good understanding of the Total Debt Servicing Ratio (TDSR) framework, which sets a limit on the amount of loan a borrower can take based on their income and current debt obligations. To navigate this framework successfully, it is advisable to seek the guidance of financial advisors or mortgage brokers. This will help investors make informed decisions about their financing options and avoid the risk of over-leveraging.
Singapore’s largest real estate agency, PropNex, has announced a decline in its earnings for the second half of FY2024 ended December 31, 2024, with a decrease of 14.9% year-on-year to $21.9 million. This brings the full-year earnings to $40.9 million, a drop of 14.4% compared to the previous FY2023. The company attributes this decline to the relatively subdued property market, which has resulted in a 6.6% dip in revenue for FY2024 compared to FY2023.
However, despite the challenging market conditions, PropNex plans to mark its 25th anniversary by paying a special dividend of 2.5 cents per share, in addition to a final dividend of 3 cents. This will bring the total dividend payout for FY2024 to a record of 7.75 cents, representing a payout ratio of 140.1% and a yield of 8.2%.
Despite the decrease in earnings, PropNex has seen a pick up in activities in the last quarter of 2024, driven by a surge in new private home units which the company helped to sell. This is in line with DBS’ recent upgrade of PropNex and APAC Realty to a ‘buy’ rating, citing a strong pipeline of new launches in 2025.
PropNex explains that the financial effects of these sales will only be booked three to four months later, indicating a significant pick-up in the current 1HFY2025 numbers. The company is confident of a strong performance in FY2025, given the expected favourable property market outlook, barring any unforeseen events.
This positive outlook is supported by an estimated 13,000 new unit launches (including ECs), almost double the supply recorded in 2024. The private resale market is also expected to remain active, with transaction volumes expected to be between 14,000 and 15,000 units. The persistent price gap between new and non-landed resale properties, a preference for larger, move-in-ready homes, and the impact of fewer new supply completions are expected to fuel demand in this segment.
In the HDB resale market, PropNex foresees a price growth of 5% to 7% and volumes reaching 29,000 to 30,000 units. This is due to fewer five-year minimum occupation period flats entering the market and sustained demand from urgent homebuyers, unsuccessful Build-To-Order applicants, and budget-conscious families.
PropNex CEO, Ismail Gafoor, observes that newly-launched projects such as The Orie, Bagnall Haus, Parktown Residence, and ELTA have generated strong market interest. He anticipates a positive demand for developers’ sales in 2025, with a compelling line-up of projects. Along with a positive economic outlook and lower mortgage rates, this could further boost market confidence, creating opportunities for both homebuyers and investors.