Despite Singapore’s robust economic expansion in late 2025, the shophouse market stumbled through the final quarter of the year, recording just 22 transactions worth $158.3 million, a 21.4% drop from the previous quarter’s 28 deals and a 27.6% plunge in total value from Q3’s $218.6 million.
The year-on-year comparison looked equally grim, with both transaction numbers and values declining by about 12% compared to Q4 2024, when 25 deals fetched $180.3 million.
The full-year picture proved even more sobering. The 88 shophouse deals completed in 2025, worth $623.2 million collectively, marked the weakest annual sales value since 2014’s $585 million tally, representing a decline from 2024’s $699 million.
This underwhelming performance came despite Singapore’s GDP expanding 5.7% quarter-on-quarter in Q4 2025, the strongest growth in four years, and full-year economic growth reaching 4.8%.
The year’s trajectory told a story of false starts and missed momentum. Q2 2025 hit particularly hard, with just 18 transactions valued at $127 million as US trade tariff uncertainties spooked buyers and created price mismatches between sellers and potential purchasers.
Smaller deals below $5 million dominated this cautious period, reflecting investor hesitation.
Q3 brought hope with a sharp recovery, logging 27 deals worth $210 million, the most active quarter in nearly two years with a 65.3% quarter-on-quarter value increase. The commercial shophouse market had rebounded in Q3 2025 with positive sentiment following Singapore’s economy growing 1.3% QoQ in the quarter.
Unfortunately, this rebound couldn’t offset the weaker first-half performance, and Q4’s moderation dashed hopes for a strong finish. PropNex cautioned that actual deal numbers could be higher than reported figures due to unlodged caveats.
The leasing market mirrored this softness. Rental contracts dropped 4.9% quarter-on-quarter in Q2, falling from 841 in Q1 to 800, while median rental rates dipped slightly from $6.59 per square foot in Q3 to $6.50 in Q4.
Retail and food-and-beverage closures rose as tenants grappled with climbing operational costs, particularly in the F&B sector, limiting rental growth potential. However, the leasing market demonstrated surprising resilience compared to sales, with demand holding up due to the scarcity and heritage charm of shophouses.
Looking ahead, market watchers expect transaction volumes to remain uneven despite Singapore’s solid economic footing, as investor sentiment stays sensitive to external risks and global policy uncertainties, though limited shophouse supply continues providing underlying support.
