As economic storms brew on the global horizon, Singapore’s shophouse market, once a bustling hub of investment, is feeling the chill of macroeconomic turbulence. Transaction values have plummeted, dropping to a mere $595 million in 2024 from a hefty $1.1 billion the year before, marking a 26-year low in demand.
Singapore’s shophouse market reels from global economic storms, with transaction values crashing to $595 million in 2024, a stark 26-year low.
Compare that to the 2021 peak of 245 units sold for $1.8 billion, and it’s clear the market has hit a rough patch. With economic growth slowing to a projected 0.0%-2.0% in 2025, down from 4.4% in 2024, global financial volatility and rising interest rates are spooking investors, while tighter credit and cautious sentiment further dampen activity.
Despite the gloom, not all news is bad. The Shophouse Resale Price Index crept up by 0.9% in Q2 2025, achieving a 2.5% rise for the first half of the year, though this pales against 4.2% growth in early 2024. Additionally, freehold shophouses continue to dominate the market, maintaining their appeal with 69.4% of transactions in 2024.
Landed shophouse prices did slip in 2024, breaking an upward trend, yet limited supply and the high cultural value of these conserved properties keep prices somewhat steady. Premium spots and corner units, especially, hold their worth better than others, showing that location still reigns supreme in real estate. Moreover, despite the downturn, the rarity and diversity of shophouses continue to attract local and international buyers.
Sales volumes, however, tell a grimmer tale, hitting multi-decade lows in 2024 and continuing to slide into 2025, well below pre-pandemic averages. Investors are pickier now, focusing on prime locations and unique assets, while other property sectors like strata offices seem to fare better.
Adding to the caution, many are rethinking exposure to food and beverage tenants due to post-pandemic volatility in that sector—after all, nobody wants a tenant who might close shop overnight.
Still, there’s a silver lining for the patient. Private wealth and family offices remain drawn to shophouses for diversification and capital preservation, favoring long-term stability over quick profits. The leasing market remains surprisingly resilient despite the sales slump, with owners preferring stable rental income over selling in the current environment.
With supply naturally constrained by conservation rules, and commercial property supply tightening through 2027, historic shophouses in key areas retain their charm. If macroeconomic conditions stabilize in 2025, as some predict, a cautious recovery might just be around the corner—fingers crossed!
