SHOPHOUSE sales in Singapore declined in the third quarter of 2024 to 18 caveated deals, down from the 21 deals recorded in the previous quarter, Huttons Asia’s latest market update on Tuesday (Nov 12) showed.
In the first nine months of 2024, an estimated 62 shophouses were transacted, down 46.1 per cent in sales year on year.
Huttons Asia data analytics senior director Lee Sze Teck noted that there were a number of shophouse sales during the quarter which did not lodge a caveat, as it is not compulsory for property buyers to lodge one with the authority.
He cited sources which indicated that several shophouses in Districts 1 and 2 along Amoy Street, Neil Road and Telok Ayer Street were sold in Q3 with an estimated quantum “to exceed S$70 million” that did not lodge caveats.
Besides these, there were a few other shophouse transactions without caveats at close to S$60 million in total in District 7, he added.
For the 18 sales in Q3 which had lodged a caveat, the total transacted value was S$138.9 million, down 28.8 per cent from Q2’s S$195.1 million, and about half of S$278.6 million posted in the corresponding period the previous year.
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For the first nine months, shophouse sales totalled S$519 million, 48.5 per cent lower than the same period in 2023.
Freehold and 999-year tenure shophouses accounted for almost all the transactions in Q3.
Most of the transactions were in District 8, likely due to “its attractive city-fringe location and quantum vis-a-vis Districts 1 and 2”, said Lee.
By quarter
On a quarterly basis, rental transactions increased 3.2 per cent in Q3 to 927 deals. Median rents, however, were down 2.8 per cent.
The largest quarterly change in median rents was in District 1, which decreased 8 per cent from S$8.35 per square foot per month (psf pm) in Q2 to S$7.68 psf pm in Q3.
Shophouses located in District 15 also had a quarterly drop of 6.8 per cent to S$5.80 psf pm in Q3 versus S$6.22 psf pm in the preceding quarter.
Based on Huttons’ data, median rents of shophouses located in District 2 rose 2.8 per cent, from S$8.08 psf pm in Q2 to S$8.31 psf pm in Q3.
The biggest gain in this quarter was for a shophouse located at Atland House along Bukit Timah Road with a land area of 2,083 square feet (sq ft), which sold for S$17 million. Huttons said the owner held it for 24 years and the estimated gains from this transaction amounted to S$16.9 million.
Other leading transactions during the quarter included a shophouse at 42 Club Street with a land area of 1,185 sq ft that sold for S$13.3 million; and a shophouse at 20 Upper Weld Road with a land area of 1,721 sq ft that fetched S$10.8 million. The latter transaction resulted in S$4.6 million in estimated gains over a two-year period.
Huttons noted that demand for shophouses has been picking up in the last few months.
Lee said: “Investors are attracted to this market segment due to its scarcity and potential strong capital gains. With the interest rate cuts in the last couple of months, shophouses are getting popular as a wealth creation and preservation asset.”
The agency estimates that transaction volume and sales quantum of shophouses “may trend higher in the last quarter of 2024”.
