A staggering 43% drop in shophouse sales value marked the first quarter of 2025, with transactions plummeting to just S$100 million compared to the previous quarter, according to recent data. This sharp decline, as reported by PropNex, reflects the lowest quarterly activity in recent years for this unique property segment in Singapore.
Not only did the total value tank, but the number of deals also fell by 21%, with just 19 transactions completed compared to 24 in the prior quarter. Looking back a year, the picture isn’t much brighter—sales value dropped 46% from S$185 million in Q1 2024, and volume dipped by 17%. While other resale markets saw only slight slowdowns, shophouses took a harder hit, signaling specific challenges for this niche.
Shophouse sales plummeted 46% from S$185 million in Q1 2024, with deal volume down 17%, highlighting unique struggles in this niche market.
Behind this downturn lies a cautious mood among investors, fueled by global uncertainties like geopolitical tensions and trade tariff worries. Buyers and sellers just can’t seem to agree on pricing, creating a stalemate in the market. Many investors, wary of big-ticket purchases, are holding back, especially as volatility in buyer interest—particularly for heritage properties—has spiked in recent quarters. Despite the slowdown, demand for freehold and 999-year leasehold shophouses remains robust, accounting for 90% of sales.
It’s no surprise that some are shifting to safer, defensive investment strategies, hoping to weather the storm. Yet, amidst the gloom, a few standout deals caught attention, like a Telok Ayer shophouse fetching S$14.8 million, or about S$12,488 per square foot, showing that prime assets still command hefty sums. Elevated interest rates are also impacting buyer decisions, contributing to increased caution in high-value transactions.
On the leasing front, things look steadier, with demand for shophouses holding up despite the sales slump. Their scarcity and heritage charm keep them appealing, especially for hospitality uses, as tourism is expected to grow in 2025. Owners, sensing the uncertainty, are focusing on stable leases rather than selling.
Looking ahead, the market might consolidate further, with both sides playing a waiting game. If trade tensions worsen, deal activity could shrink even more. Still, shophouses, with their limited supply and cultural value, remain a long-term bet for patient investors. After all, in Singapore’s stable, business-friendly environment, these gems might just shine again—eventually.
