Despite Singapore’s sluggish property market, PropNex Realty saw gross commissions soar to a record high of $200 million in 2015, while transaction volume surpassed 40,000 for the first time.
In a statement, the real estate agency said its strong financial results were achieved against a backdrop of rising interest rates, softer economic growth, falling prices and transaction volumes, oversupply worries and higher vacancy rates.
Developers also face hefty extension charges for unsold units, while the exodus of property agents continues. During the latest license-renewal period with the Council for Estate Agencies (CEA), the number of registered agents and real estate agencies fell by eight percent and four percent respectively from 2014’s numbers. Only 1,299 new agents joined the industry in 2015, versus 3,006 in the previous year.
In recent years, PropNex, which has a stable of over 6,000 agents, has been appointed as the marketing agency for more than 40 local projects.
Of these, there are still around 7,500 unsold units, which the company plans to help clear, including private condos, executive condominiums (ECs), landed homes, as well as commercial and industrial properties.
Meanwhile, PropNex has proposed a number of tweaks to the government’s property cooling measures. These include easing the loan-to-value (LTV) limits, reducing the Additional Buyer’s Stamp Duty (ABSD) for local and foreign buyers, and raising the mortgage servicing ratio (MSR) for EC buyers to 45 percent, from the current 30 percent.
These recommendations are based on feedback and observations gathered from its 200,000-plus transactions since 2009.
PropNex believes that now is a good time to calibrate some of the cooling measures, as home prices have become more affordable, non-performing loans were at just 0.4 percent as at Q3 2015, and there is looming oversupply.
Speculative activity has also lessened, with quarterly sub-sales at just three to four percent of last year’s total volume. Furthermore, foreign demand has declined, with expatriates accounting for just eight percent of the overall volume in 2015, down from about 18 percent in 2011.
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