Q3 Update: Why Are Singapore Shophouses Surging?
- Shophouses attract demand for scarcity, heritage appeal and no ABSD on commercial units.
- Family offices and investors favour their conservation status.
- Commercial shophouses carry different financing and GST rules.
In Q2 2025, Singapore shophouses saw 5% more transactions than the prior quarter, but total sales value surged 179% to S$332.9 million. The takeaway: capital is moving back into shophouses because they're scarce, hold long-term value, and the best ones rarely hit the open market.
Why Investors Are Buying Now
Momentum at the top end. Q2 2025 saw S$332.9m transacted (+179% vs Q1), lifted by larger deals; volume rose to 21 deals (+5% q/q). H1 2025 held up. 42 units changed hands for S$462.9m, just below H2 2024's S$520.2m; full-year 2025 is forecast at S$700m–S$800m. Prices are steady. Average land psf edged up to S$6,431 in H1 2025 (from S$6,397 in H2 2024); freehold dominates (37 of 42 H1 2025 deals). Supply is capped. There are only 6,500 conserved shophouses in Singapore — no new supply will ever be created. Policy advantage. Commercial-zoned shophouses are not subject to ABSD (unlike residential), and BSD tops out at 5% versus 6% — a key edge for foreign buyers.
Sales Data (H2 2023 – H1 2025)
- H2 2023: 53 units, S$428.2m
- H1 2024: 40 units, S$354.0m
- H2 2024: 50 units, S$520.2m
- H1 2025: 42 units, S$462.9m; average S$6,431 psf (land)
Sources: Business Times, SBR / EdgeProp.
Why the Market Is Holding Up
Safe-haven demand plus limited supply: family offices and UHNW investors favour shophouses for wealth preservation. With residential ABSD as high as 60% for foreigners, shophouses offer a more tax-efficient entry. Boutique hotels and co-living conversions are performing well on the back of tourism and business travel, and District 8 (Little India / Jalan Besar) remains highly active.
Risks and Considerations
Investors are resisting unrealistic asking prices; deals close when pricing aligns with rental income. Prime locations, corner lots and wide frontages command premiums, while secondary locations are harder to move. URA conservation rules are strict — due diligence on fire safety, rear extensions and approved uses is essential.
What To Buy Now
For migration or own-use (business plus family office), commercial-zoned units near MRTs are attractive — no ABSD, steady demand, good exit flexibility. For high yield, corner or dual-frontage units with existing F&B approvals lease up faster. For value-add ROI, look for under-managed stock with a clear repositioning path — boutique hotels, co-living or creative F&B with proven operators. With only 6,500 conserved shophouses in existence, opportunities are always limited.