Analysts downgrade PropNex on expected slowdown in home sales

[SINGAPORE] Analysts have downgraded their calls on PropNex on forecasts that a moderation in residential sales for 2026 could impact earnings, after the real estate firm posted record performance for 2025 last week.

Phillip Securities on Monday (Mar 2) lowered its recommendation for PropNex to “accumulate” from “buy”, on expectations of a decline in new home sales in 2026, but raised its target price to S$2.08 from S$2.02.

Meanwhile, DBS on Monday downgraded its call on the firm to “hold” and lowered its target price to S$1.95 from S$2.15, using a sum-of-the-parts approach. The bank pointed to a “more measured earnings growth profile” moving forward following a share price rally of nearly 100 per cent in 2025.

This comes as PropNex on Friday recorded its strongest full-year revenue in its 25 year history, with revenue up 42.6 per cent at S$1.1 billion from S$783 million previously, and net profit rising 72 per cent on the year to S$70.4 million for FY2025.

Paul Chew, Phillip Securities head of research, expects new home sales to decline by 17 per cent decline for 2026, while private and HDB resale volumes are expected to be flat. However, he noted that H1 2026 earnings will register strong unbilled sales in Q4 2025.

This comes as a lower number of new launches and the absence of pent-up demand will impact new home sales, Chew said. He noted that some 8,800 units are to be launched in 2026, down from 11,409 units in 2025.

Similarly, DBS analyst Tabitha Foo projects a “more modest growth trajectory” for PropNex in FY2026 to FY2027, with a “more modest pipeline of new launches in 2026” after 2025 recorded stellar sales volumes, especially in the primary market.

“The launch pipeline comprises a larger proportion in the Outside Central Region, which typically is more price quantum sensitive. Nonetheless, with its commanding market share, PropNex is still poised to capture a lion share of transactions,” Foo said.

Phillip Securities’ Chew forecasts PropNex’s profit after tax and minority interests for FY2026 to come in 15 per cent lower.

Foo noted that DBS has lowered its earnings estimate for FY2026 to FY2027 by around 21 to 22 per cent on assumptions of lower new home sales.

Strong demand driven by population increase, market leadership

While home sales volumes are set to ease, Phillip Securities’ Chew expects population growth to shore up strong underlying demand for residential property.

Chew highlighted an expected increase in population numbers for 2026, with an expected increase of 25,000 to 30,000 new citizens. He said: “New citizens are incentivised to purchase properties by lower or no stamp duty, the avoidance of high rent and their tendency to have higher-tier income.”

“There is a rising number of wealth transfer buyers where parents support the property purchase of their children,” Chew added.

DBS believes that PropNex’s leading position in Singapore’s real estate brokerage services market and large sales force should enable it to grow its market share across various segments and support its performance in 2026.

“Given its commanding market share and diversified earnings base (new launches, private resale and HDB resale), performance in 2026 could still come in higher year on year,” said DBS.

The bank noted that PropNex has Singapore’s most extensive sales network with more than 14,000 agents, close to 40 per cent of the share of salespersons across property agencies.