Can good times roll on for big property agencies?

SINGAPORE'S housing market prospered through the Covid-19 pandemic. As at Q4 2021, the Urban Redevelopment Authority's private home price index and the HDB Resale Price Index rose by 13 per cent and 18 per cent respectively versus Q4 2019. Excluding executive condominiums, developers sold 13,027 private homes in 2021, up from 9,982 units in 2020.

Housing developers and sellers of resale homes benefit from rising prices. But developers have faced construction delays and rising costs due to disruptions caused by the pandemic, which eat into financial returns. As for sellers of homes, while some may be laughing to the bank, others have to contend with rising prices when buying a replacement home.

The clear winners from last year's buoyant home market are the big property agencies. Strong transaction numbers and rising ticket prices per deal result in higher commissions. Moreover, the rate of commission can be around 3 per cent for new home projects today versus a rate of around 1 to 2 per cent some years back.