As of Nov 11, there were 62 shophouses on the market, down 1.6% from 63 shophouses a quarter ago, and 36.7% lower than the 98 shophouses a year ago, according to Huttons’ report. Asking prices for the shophouses range from $3 million to $49.6 million, with an average asking price of $8.3 million.The number of shophouses for sale is expected to increase in the near term as some owners may be tempted to sell amid the current market environment, Lee says. “Many shophouse owners are keen to offload their assets at prices slightly below the peak before the pandemic set in, and the current low interest rates are also encouraging buyers to enter the market.”
Huttons Asia has published its latest quarterly report on the shophouse market, and despite a decline in caveated transactions, interest in the market remains strong in 3Q2024. The report, which was released on Nov 12, revealed that there were 18 caveats lodged for shophouse transactions in 3Q2024, a decrease from the 21 caveats in 2Q2024. The total transacted quantum for these caveated shophouses was $138.9 million, down 28.8% from the previous quarter’s $195.1 million. This is also a significant drop compared to the $278.6 million transacted in 3Q2023.
However, despite the decline in caveated transactions, the report showed that 62 shophouses were sold through caveats in 3Q2024, which is an impressive 46.1% increase year-on-year from the same period last year. The total value of transactions for the first nine months of 2024 was $519 million, which is 48.5% lower than the same period in 2023.
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Huttons’ senior director of data analytics, Lee Sze Teck, notes that although there was a decline in caveated transactions, a number of shophouse deals were not caveated. According to market sources, several shophouses in Districts 1 and 2, such as those along Amoy Street, Neil Road, and Telok Ayer Street, were reportedly sold, with an estimated quantum of more than $70 million. These deals demonstrate the strong demand for shophouses, which has been picking up in recent months. Lee explains that investors are attracted to this market segment due to its scarcity and potential for strong capital gains. With the recent interest rate cuts, shophouses have become an attractive asset for wealth creation and preservation.
Lee also expects shophouse transaction volume and quantum to increase in 4Q2024. As of Nov 11, there were 62 shophouses on the market, which is down 1.6% from the previous quarter and 36.7% lower than the same period last year. The average asking price for these shophouses ranges from $3 million to $49.6 million, with an average asking price of $8.3 million. Lee predicts that the number of shophouses for sale will increase in the near term as some owners may be tempted to sell in the current market environment. He adds that many shophouse owners are eager to offload their assets at slightly below peak prices before the pandemic, and the current low interest rates are also encouraging buyers to enter the market.