Analysis: PropertyGuru Is Heavily Reliant on Singapore's Crazy Real Estate Market

Singapore is well known for its obsession with property and the market dynamics there are pretty unique...

There can't be many markets in the world in which there are more real estate agents than transactions in a year. Even the US market, which is swamped with part-time agents, has a better ratio than the Lion City.

In a nation with 35,251 agents looking to catch a commission, there were only 19,044 transactions registered by the Singaporean government in 2023. However, and in mitigation for the numbers, the likelihood is that a sizeable chunk of these agents are inactive.

Agents chasing their Dream Commission

On average each agent in Singapore gets one transaction commission every two years.

The competition isn't nearly as fierce among the real estate portals in Singapore though. PropertyGuru is the clear market leader; a recent investor presentation claimed PropertyGuru has an 82% market share and a 5.7x traffic lead over its nearest rival.

PropertyGuru is synonymous with home search in Singapore and in 2023 leveraged that position into S$86M (USD 64M) in revenue and a whopping 76% operating profit margin.

For every home sold in Singapore in 2023, PropertyGuru made a profit of over 2,500 US Dollars. In context, that is (by our calculations) more than double that of other real estate marketplaces anywhere in the world!

A big fish in a small pond?

Where does that leave agents, or at least the circa 50% of them* that pay to list on PropertyGuru?

Well, they pay around S$415 (USD 308) every month to list on the portal and although that's significantly less than agents pay to list on Rightmove in the UK (USD 1,812) or ImmoScout in Germany (USD 1211), it is a lot of money—especially in a market where the commission pool is so small.

In other words, Singaporean agents pay a higher percentage of their earnings to list on a portal than agents anywhere else globally.

We estimate** that PropertyGuru's revenue in the market accounts for a whopping 11.6% of the total earnings available to residential sales agents in the country.

Why does this matter?

PropertyGuru has a good thing going in Singapore—but where's the ceiling? How much of the commission pool can a portal take up sustainably?

Rightmove recently told investors that it believes that agents in the UK can and will pay more than 15% of their commissions to portals. So maybe there is still headroom for PropertyGuru.

But the real issue might be more about the diversification of revenue.

Some back-of-the-envelope calculations (agent numbers X yearly ARPA) reveal that fully 95% of PropertyGuru's 2023 Singapore revenues came from agents. For comparison, Rightmove's number is 90% and Scout24's was just 64%.

The company floated on the New York Stock Exchange in 2022 trumpeting the 'demographic tailwinds' that were to fill its sails. PropertyGuru no longer operates in the country with the strongest tailwinds having pulled out of Indonesia in 2023 after 12 years.

With its Data and Fintech offering yet to flourish and the Vietnamese market experiencing a downturn, a massive percentage of PropertyGuru's profits come from Singapore, specifically from Singaporean agents' pockets.

In conclusion, PropertyGuru needs Singaporeans to keep loving property, and for agents to keep chasing that dream commission.

* As of PropertyGuru Q4 2023 reporting the number of paying agents was 16,424, around half the total number of agents in Singapore given by the Council for Estate Agencies (CEA) as of Jan 2024.

** Our calculations are based on transaction numbers according to the Singapore Government and a commission pool totalling $553M. PropertyGuru's IPO prospectus from 2021 puts the commissions pool figure at $460M which would put its 2023 revenue as a percentage of the commissions pool even higher at 13.9%

Author's note:

PropertyGuru highlighted the following in an email to us after publication. For transparency, here is what they said (edited for clarity):

• The article, specifically pointers such as “For every home sold in Singapore in 2023, PropertyGuru made a profit ", seems to suggest that our revenue is driven by transactions, which is inaccurate. 
• We believe the source for the cost of our listings, which was reported in the article to be S$415/mth, is incorrect. You can refer to our agent packages online, which start from SGD 118/mth. 
• From an industry perspective, while there are more than 35,000 agents, a sizable number is estimated to be inactive and so it will be inaccurate to align this data with the overall number of transactions and commissions.