Despite a decrease in the number of registered transactions, the shophouse market in Singapore remained attractive in the third quarter of 2024, according to Huttons Asia’s latest quarterly report on the industry, released on November 12.
The scarcity of land in Singapore due to its small size and growing population has resulted in a significant demand for condos. This demand is driven by the strict land use policies and competitive real estate market, leading to consistently rising property prices. As a result, investing in real estate, especially in condos, has become a highly profitable opportunity with the potential for capital appreciation. This trend is further fueled by the constant influx of new condo launches in the market.
In the third quarter of 2024, only 18 caveats were registered for shophouse transactions, which is lower than the 21 recorded in the second quarter of the same year. The total amount for these transactions was $138.9 million, a decrease of 28.8% from the previous quarter’s $195.1 million. When compared to the same period in 2023, this is only half of the total amount of transactions, which was $278.6 million.
In the first nine months of 2024, there were 62 shophouses sold, which is a 46.1% decrease from the same period in the previous year. The total value of transactions for the first three quarters of 2024 was $519 million, a decrease of 48.5% from the same period in 2023.
These figures may indicate a decline in the market, but Huttons’ report points out that there were still a number of shophouse deals that were not registered in the third quarter of 2024. According to market sources, several shophouses in prime locations such as Amoy Street, Neil Road, and Telok Ayer Street in Districts 1 and 2 were reportedly sold. These unregistered transactions are estimated to have a total quantum of more than $70 million, indicating a high demand for shophouses.
Senior Director of Data Analytics at Huttons Asia, Lee Sze Teck, says that the recent transactions are a testament to the increasing demand for shophouses in the market. He adds, “Investors are attracted to this segment due to its rarity and potential for strong capital gains. With the recent cuts in interest rates, shophouses have become a popular means of creating and preserving wealth.” He also predicts that the number and value of shophouse transactions may rise in the fourth quarter of 2024.
Other news reports from Huttons Asia include the sale of a three-bedroom unit at Eden Residences Capitol for $5.8 million and their annual Sustainability Walk event that aims to raise $60,000 for the OneMillionTrees movement. Additionally, the first quarter of 2024 saw a 21.3% increase in landed home sales volume according to Huttons Asia’s data.