The CEO behind Singapore’s largest realtor thinks the city’s housing market will stay cool through the year—but he’s ‘very excited’ about 2025

Singapore’s housing market, running hot just a few years ago, is starting to cool off. Prices for private-sector property jumped by 6.8% in 2023, slower than the 8.6% recorded the year before. Resale prices for the city’s world-class public housing are also moderating, jumping just 4.8% in 2023, compared with 10.4% in 2022.

While that may be good news for Singaporeans looking for a new place to live, it’s been harder on the city’s property companies and real estate developers, several of which reported steep drops in profit as the Singaporean government tried to get the market under control.

Singaporean officials described their so-called cooling measures as a way to pivot the market back to owner-occupants and to “dampen demand” from local and foreign investors for the city’s residential property.

“If we don’t take early preemptive measures, we may see investment numbers both by locals and by foreigners grow, and that will add stress to Singaporeans who are looking to buy residential property principally for owner occupation,” Desmond Lee, Singapore’s minister for national development, told reporters in April 2023, after the government’s most recent cooling measure.

Yet the market was still hot enough to qualify PropNex, a real estate firm with no property developments of its own, for Fortune’s inaugural Southeast Asia 500 list, which ranks the region’s largest companies by revenue.

Singapore-based PropNex, the only realtor on the list, generates much of its revenue from commissions, collected by its army of property agents. PropNex handled 63% of Singapore’s real estate sales last year, according to the company’s annual report. (A compilation of Singapore government data puts the total number of transactions and value of real estate sales at around 48,500 and $45.7 billion, respectively.) The realtor generated $624 million in revenue in 2023, enough to place it at No. 395.

“We did exceptionally well,” PropNex CEO Ismail Gafoor says, noting that the company had record market share last year.

PropNex’s revenue fell compared with 2021 and 2022, the height of Singapore’s recent property boom. Like many cities, Singapore’s home prices surged as stuck-at-home families reassessed their living conditions. Housing supply was also constrained as the pandemic disrupted construction timelines.

An influx of new migrants flocking to relatively more open Singapore (which lowered its COVID measures earlier than many other economies in Asia) also helped boost private home prices.

“When people did not travel for one to two years, they had a lot more savings. And when they were forced to work from home, a lot of people realized that maybe their current home wasn’t the ideal home,” Gafoor says.

The mood in real estate circles soured last year. Gafoor blames higher interest rates, continued worries over the Ukraine conflict, and more important, Singapore’s property cooling measures.

But Gafoor is optimistic that Singapore’s property market will quickly bounce back. “This year should be about the same as last year, maybe marginally better. But we are very excited moving forward into 2025 and beyond,” he says.

What is PropNex?

Gafoor started getting interested in real estate while serving as a full-time soldier in Singapore’s military. During his free time, he and his wife—also a member of the military—visited open houses to learn more about the market. The two of them set up their own realty firm, Nooris Consultants, in 1996 after Gafoor hit his 13th year of service.

In 2000, Gafoor partnered with three other realty firms to set up PropNex. The company started by helping Singaporeans sell their public housing flats—known locally as “HDB” flats, after the city’s Housing & Development Board—before expanding to cover private property and corporate leasing.

PropNex is now the largest listed real estate agency in the country, after debuting on Singapore’s stock exchange in 2018. PropNex’s 12,000 agents make up a third of all registered agents in Singapore.

Most of PropNex’s revenue comes from Singapore, but the agency has plans to expand internationally. Its overseas presence now includes Indonesia, Malaysia, Vietnam, Cambodia, and Australia.

What’s happening with Singapore’s property market?

Singapore has a homeownership rate of almost 90%. That’s in part the result of government policy, which has long portrayed homeownership as key to nation-building.

Public housing makes up most of Singapore’s residential property. About 72% of Singapore’s 1.5 million homes are from the HDB, estimates Leonard Tay, head of Singapore research at Knight Frank, a global real estate consultancy. Singapore offers support to those wishing to buy public housing: Now, more than 80% of Singapore residents live in homes built by the government, with the remainder living in residences built by the private sector.

The concept of “public housing” sometimes has a poor reputation in several other housing markets. Yet in Singapore, public homes are well-built, well-maintained, and highly sought after, with some flats selling for over 1 million Singapore dollars ($739,000) on the open market.

These sale prices can give sellers the “financial gunpowder” to move to private-sector housing, says Tay. Given their lower supply, these homes tend to command a premium compared with their HDB-built counterparts.

Gafoor notes that a sizable part of PropNex revenue comes from the HDB market, which is less susceptible to the Singaporean government’s cooling measures. Commissions from public housing resales made up 18% of PropNex’s 2023 revenue, up from 15% the year before. The real estate agency’s share of the rental market also rose to 22% in 2023, up from 17%.

Still, private property sales and related activities generated 56% of PropNex’s revenue in 2023. This sector is far more susceptible to government measures to lower price increases.

Singapore has tried to restrain the property market since late 2022. For example, it forced private-home owners under the age of 55 to wait 15 months between selling their home and moving into public housing.

The waiting period targets a practice among some Singaporeans trying to take advantage of the price difference between private-sector and public housing. Private-home owners can sell their private property, buy an HDB flat on the open market, and pocket the difference. Singapore says the waiting period will prioritize public housing for Singaporeans with more urgent needs.

But despite the hit to his sales, Gafoor thinks Singapore’s cooling measures are a good thing.

These restrictions ensure that only “genuine buyers enter the market with a desire to hold and keep and grow, which means property prices remain more resilient amidst unforeseen circumstances,” he says.

Rampant speculation means property prices will “surge high and low,” Gafoor says. “That doesn’t give stability for investors.”

This story was originally featured on Fortune.com