PropNex clocks in record commissions in 2015 down-market

DESPITE challenging market conditions, PropNex Realty clocked in record gross commissions of more than S$200 million last year, compared to S$194 million in 2014.

Transaction volumes crossed the 40,000 mark, up 22 per cent from 2014, PropNex CEO Ismail Gafoor said. These figures are based on unaudited numbers for 2015.

Singapore's second-largest property agency with a salesforce of some 5,500 agents has also beefed up its project marketing team lately.

It has appointed Alvin Tan, former senior director at Savills (Singapore), as executive director and head of local projects; Richard Nah, former senior sales and marketing manager at MCC Land (Singapore), as associate director for residential project marketing with effect from March 1; and Kelvin Fong, who heads its largest team of salespersons, as executive director focusing on business development, training and recruitment.

Mr Gafoor shared these updates with some 2,500 agents and guests at PropNex's annual convention at The Star Theatre at Star Vista on Wednesday. Taking the opportunity to air his views on property cooling measures, he reckoned it is "the right time to calibrate some of the measures" given that speculative activity has tapered off and there is a major demand-supply imbalance due to weak demand and looming oversupply.

A fuller list of recommendations was already submitted to the Ministry of Finance and the Ministry of National Development.

"We think that pre-emptive calibration of the measures rather than post-corrective actions would be a better way to go in achieving a stable and sustainable property market; this is especially so as we have a home ownership rate of 90 per cent," he said. "As such, we are of the view that a large correction in property prices is not a desirable outcome for most people."

While affirming support for the total debt servicing ratio (TDSR), PropNex recommended that the additional buyer's stamp duty (ABSD) can be pared for all groups of buyers in a measured way, while loosening the loan-to-value limits since the TDSR that caps borrowings at 60 per cent of gross monthly income already does its job in preventing over-leverage.

For ABSD, the proposed tweaks take into account the need to protect Singaporeans looking to buy a home of less than S$3 million in the city-fringe or suburban area, to stay or upgrade on the one hand and the need to ensure sustainable growth for high-end properties in Core Central Region on the other.

For first home purchases, PropNex suggests ABSD be trimmed to zero for Singapore permanent residents or PRs (from 5 per cent currently) and to 5 per cent for foreigners on home purchases of more than S$3 million (from the 15 per cent). For second home purchases, PropNex suggests ABSD be brought down to zero for Singaporeans (from the current 7 per cent), to 5 per cent for Singapore PRs (from the current 10 per cent), and to 10 per cent for foreigners on home purchases of over S$3 million (from the current 15 per cent).

As for third home purchases, PropNex suggests ABSD be cut to 5 per cent for Singaporeans (from current 10 per cent), while maintaining current ABSD levels for other buyer groups.

PropNex also proposed the mortgage servicing ratio (MSR) for executive condominiums (ECs) be raised to 45 per cent from the 30 per cent currently applied on both Housing & Development Board (HDB) flats and ECs, since the quantums for ECs are much higher than new HDB flats.

"Also, the side effect of 30 per cent loan cap is that developers construct smaller sized ECs to meet the MSR restrictions, which again run contrary to the government's repeated calls for Singaporeans to procreate," it said.