Shophouse Transactions Lower 3Q2024 Uncaveated Deals Show Demand Huttons Asia
“The shophouse market has seen keen interest from local and foreign investors, as they chase after assets that can hedge better against inflation,” says Lee. Furthermore, the gradual reopening of the travel sector may see more foreign investors returning to Singapore and the shophouse market, he adds.The continued interest in shophouses is also driven by the strong rental market. In 3Q2024, the rental index for shophouses rose for the third consecutive quarter, increasing by 1.3% q-o-q, according to the Urban Redevelopment Authority (URA). On a y-o-y basis, rental growth reached 3.1% in 3Q2024, up from 1.3% in 2Q2024.Read more: URA to tighten rules for landed housing, preferential to adopting child, elderlyLiving in a conservation shophouse: Is it viable for seniors?“The healthy rental market has translated to capital values that are holding firm despite a low transaction volume. The median capital values of shophouses are hovering around $2,800 psf, which is about 4.4% higher than a year ago,” Lee observes. He adds that shophouses in the central region took the lead in capital value growth, with a 4.2% increase in 3Q2024.In conclusion, despite a decline in caveated transactions, the shophouse market in Singapore remained resilient in 3Q2024. With continued interest from both local and foreign investors, as well as a strong rental market, shophouse prices and rental rates are expected to hold steady.The shophouse market in Singapore has consistently shown strong resilience, even amidst the current economic climate. According to Huttons Asia’s quarterly shophouse market report published on November 12, the demand remained robust in 3Q2024, despite a slight decline in caveated transactions.
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In the third quarter of 2024, interest in the shophouse market in Singapore remained strong, despite a decrease in the number of recorded transactions, as per Huttons Asia’s latest quarterly shophouse market report published on November 12. As compared to the second quarter of 2024, there were 18 caveats lodged for shophouse transactions in 3Q2024, which is lower than the 21 caveated deals in the previous quarter. The total transacted quantum of the caveated shophouses was $138.9 million, which represents a 28.8% decrease from the previous quarter’s figure of $195.1 million. When compared to the third quarter of 2023, this represents a 50% decrease in the transacted quantum.With caveats recording 62 shophouses sold in the first nine months of 2024, as compared to the same period last year, there was a 46.1% decrease in the number of shophouse transactions. Furthermore, the total value of transactions during the first three-quarters of 2024 was $519 million, which reflects a 48.5% decline as compared to the same period in 2023, according to data from caveats.Read also: Indon tycoon Bachtiar Karim’s family office Invictus Developments buys lyf Ginza Tokyo for $93 milAdvertisementAdvertisementDespite the decrease in figures with regards to recorded transactions, Huttons’ report notes that several shophouse deals in 3Q2024 were not caveated. According to Lee Sze Teck, senior director of data analytics at Huttons Asia, “According to market sources, several shophouses along Amoy Street, Neil Road and Telok Ayer Street in Districts 1 and 2 were reportedly sold.” These deals have been valued to exceed $70 million. This increase in deals is indicative of the increased demand for shophouses, which has been observed in the last couple of months. Investors have been drawn to this market segment, which offers scarcity and the potential for strong capital gains. The decrease in interest rates has also been a key factor, making shophouses popular as a source of wealth creation and preservation. It is expected that there will be a rise in shophouse transactions and the total quantum for 4Q2024, as demand continues to grow in the market.RELATED NEWSA three-bedroom Eden Residences Capitol unit is being sold for $5.8 millionThe Huttons Asia’s Sustainability Walk to raise $60,000 for the OneMillionTrees movementIn the first quarter of 2024, landed home sales volume rose by 21.3% q-o-q: Huttons Asia”The shophouse market has seen a great deal of interest from both local and foreign investors, who are seeking assets that can help them hedge against inflation,” notes Lee. As the travel sector continues to reopen incrementally, it is expected that more foreign investors will return to Singapore, further bolstering the demand for shophouses.As there has been growing interest in shophouses, driven by a strong rental market, it was reported that the rental index for shophouses increased for the third quarter in a row in 3Q2024, recording a 1.3% q-o-q increase. This represents a 3.1% y-o-y increase when compared to 2Q2024’s 1.3% recorded rental growth.Read more: URA to tighten rules for landed housing, adoption of children and the elderlyAre senior citizens able to reside in a conservation shophouse healthily?Huttons Asia’s Lee Sze Teck notes that “The robust rental market has translated into stable capital values, despite the low transaction volume.” Median capital values of shophouses are recording around $2,800 psf, representing a 4.4% increase from the figure recorded a year ago. It was observed that shophouses located in the central region recorded the highest growth in capital values, with a 4.2% increase in 3Q2024.In conclusion, despite the decrease in recorded caveated transactions, the shophouse market in Singapore remains resilient in 3Q2024. The market continues to attract the interest of both local and foreign investors, and with the rental market remaining strong, there is a stable outlook for prices and rental rates in the shophouse market. In the face of the economic slowdown, the shophouse market in Singapore has continued to demonstrate its resilience. As evident in Huttons Asia’s quarterly shophouse market report published on November 12, the demand for shophouses remains robust in 3Q2024, despite a slight decrease in recorded transactions.