SINGAPORE: The shophouse market in Singapore has recently witnessed a significant surge in sales, with a 31.3% increase in the first quarter of 2024 compared to the previous quarter.
Singapore Business Review reported that this surge comes as the Singapore Police Force has begun the process of selling shophouses linked to money laundering probe, sparking renewed interest among buyers.
According to a report by Huttons, the initiation of the sales process has provided much-needed clarity and confidence to potential buyers, leading to a buzz in the market.
This surge in interest has breathed new life into the shophouse market with a notable 31.3% quarter-on-quarter surge in sales, which had seen a decline in sales in the previous year, where sales plummeted by 34.4%.
In terms of transaction value, the first quarter of 2024 saw a 62.3% increase compared to the previous quarter, reaching a total of S$180.3 million.
Shophouses that changed hands during this period were sold at an average price of S$8.6 million, close to pre-money laundering probe levels of around S$9.0 million.
District 8 was the most sought-after market, accounting for nearly half of all transactions. Deals in this district ranged from S$4.9 million to S$14.4 million.
Meanwhile, Districts 1 and 2 experienced a resurgence in buying interest after a relatively quiet quarter in the previous period.
Hutton said, “Buyers paid between S$9.5 and S$19.0 million for the shophouses in Districts 1 and 2 in the first quarter of 2024.”
Huttons added that investors have been particularly interested in acquiring 999-year leasehold and freehold shophouses to preserve their wealth.
In District 1, the largest transaction of the first quarter was the sale of a freehold shophouse on Pagoda Street for S$19.0 million.
The seller reportedly pocketed an estimated S$2.75 million in profit after holding the property for approximately five years. Looking ahead, Huttons anticipates continued investor interest in the shophouse market in the coming quarters.
The rarity of shophouses, along with lower barriers to entry for foreign investors compared to the residential market, is expected to support prices and drive capital appreciation. /TISG
Read also: Pair of two-storey shophouses at 48 Peck Seah Street on sale for $22.9 million
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