_Shophouse Market Update H1 2023
Shophouse market undeterred by economic uncertainty
July 31, 2023
Highlights
- The shophouse market in Singapore continued to be attractive to buyers in the first half of 2023, especially after the April 2023 implementation of increased Additional Buyer’s Stamp Duty (ABSD) rates for the residential sector.
- A total of 75 shophouse transactions amounting to S$711.6 million was recorded in H1 2023, an increase of 7.2% compared to H2 2022.
- Despite the increased sales volume in H1 2023 compared to the S$663.5 million sales representing 72 transactions in H2 2022, this was nonetheless below the S$962.8 million sales recorded in H1 2022 with 119 shophouse deals.
- Out of all the shophouses transacted in H1 2023, 78.7% or 59 units had 999-year or freehold tenures, making up the majority of the total.
- Leasehold shophouses did not perform as well in H1 2023, with the transactional value 15.7% lower at S$139.0 million compared to S$164.9 million in H2 2022.
- As conservation shophouses are highly coveted for their heritage value, cultural qualities and limited quantity in the market, supernormal profits from capital appreciation are regularly observed the longer the asset is held.
- Buyer/investor interest is expected to continue with foreign private wealth sources turning from residential assets to shophouses, driving demand and the growth of prices to new levels.
- In addition, more locals in Singapore are also on the lookout for shophouses in trendy dining and tourist locations with
entrepreneurial intentions to create greater diversity and epicurean choices in the food and beverage scene. The ongoing gentrification of conservation areas in Singapore as culinary hotspots, has been and will continue to pull in the growing tourist throng as international visitor arrivals normalise to pre-pandemic levels. - Given the positive momentum in the shophouse market in the first half of 2023, the earlier projected sales volume of S$1.3 billion to S$1.5 billion is likely for the whole of the year.
Read the full report here.
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