- APAC Realty's share price has severely underperformed year-to-date (-26%) amid a significant slowdown in primary transaction volume, which is a key earnings driver.
- While 2024 earnings are expected to remain weak, we see a healthy pick-up in 2025 primary transaction volumes driving an earnings turnaround.
Three factors supporting primary volume recovery in 2025.
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- developers pricing projects attractively amid increased competition from new launches and also to avoid incurring punitive Additional Buyer’s Stamp Duty (ABSD), which kicks in if developers do not sell all the units within five years from land acquisition, and
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- The new home sales segment typically accounts for 40-60% of APAC Realty’s gross profit. Private new home sales have been tepid in 2024 with August sales (excluding executive condominiums) of 208 units (-64% m-o-m, -47% y-o-y) representing a record low. Year-to-date (August) volumes are down 49% y-o-y at 2,886 units, and full-year volumes are likely to fall short of our expectations of 6,000-6,500 units.
Resale and rental markets to remain resilient.
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