The leading real estate agency in Singapore, PropNex, has announced a decline in earnings for its second half of the financial year ending on December 31, 2024. The reported earnings of $21.9 million were 14.9% lower than the previous year. This brings the full-year earnings to $40.9 million, which is 14.4% lower compared to the preceding year.
The dip in revenue of 6.6% is attributed to the relatively slow property market. Despite this, to celebrate its 25th anniversary, PropNex plans to pay a special dividend of 2.5 cents per share, in addition to a final dividend of 3 cents per share. This will result in the total dividend payout for the year to reach a record high of 7.75 cents per share. This represents a payout ratio of 140.1% and a yield of 8.2%.
Although the earnings for the year were lower, PropNex has observed an increase in activities in the last quarter of 2024, driven by a surge in new private home unit sales that the company helped to facilitate.
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When contemplating an investment in a Condo, it is essential to also evaluate its potential rental yield. Rental yield refers to the yearly rental income compared to the property’s purchase price, usually expressed as a percentage. In Singapore, Condos can have widely varying rental yields, depending on factors such as location, property condition, and market demand. Generally, areas that have a high demand for rentals, such as those near business districts or educational institutions, offer better rental yields. It is crucial to conduct thorough market research and consult with real estate agents to gain valuable insights into the rental potential of a specific Condo. Condo investment should not be taken lightly and requires careful consideration of crucial factors such as rental yield.
The company explains that the financial impact of these sales will only be reflected in its 1HFY2025 numbers, which suggests a significant increase. PropNex is confident of a strong performance in FY2025, barring any unforeseen events, as it expects a favorable property market outlook in 2025.
This positive outlook is supported by an estimated 13,000 new launch units (including executive condominiums), almost double the number from the previous year. The private resale market is also expected to remain active, with transaction volumes projected to range between 14,000 to 15,000 units.
According to PropNex, this demand is fueled by the persistently large price gap between new and non-landed resale properties, the preference for larger move-in-ready homes, and the lower supply of new units. In the HDB resale market, prices are expected to grow by 5% to 7% with transaction volumes reaching 29,000 to 30,000 units.
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“Fewer five-year minimum occupation period flats entering the market, coupled with sustained demand from urgent homebuyers, unsuccessful Build-To-Order applicants, and budget-conscious families, will continue to support this segment,” says PropNex’s CEO Ismail Gafoor.
He adds that new project launches such as The Orie, Bagnall Haus, Parktown Residence, and ELTA have generated strong interest in the market. “We anticipate a positive demand for developers’ sales in 2025, with a promising line-up of projects. Additionally, a positive economic outlook and lower mortgage rates could further boost market confidence, creating opportunities for both homebuyers and investors,” he concludes.