Locals overtake foreigners in shophouse deals as taxes bite

Higher-value deals lifted transaction values in the second quarter.

Singapore investors are driving demand for commercial shophouses as buyers seek stable rental income and tax-efficient assets, whilst overseas interest is beginning to recover, property analysts said.

“Even in the recent war, there are more buyers in the marketplace,” Maureen Li, founder and CEO at ABIEL Property Investment Fund Pte. Ltd., told Singapore Business Review via Zoom, adding that investors are looking for completed properties with stable rental income.

Richard Tan Kah Peng, an associate branch district director at PropNex Realty Pte. Ltd., estimated that Singaporeans now account for 60% to 70% of purchases involving commercial shophouses—low-rise heritage buildings with retail space below and offices or other commercial uses above.

This reverses the situation a decade ago when foreign buyers made up half or more of transactions, he said in a separate Zoom call.

He noted that higher taxes on residential property purchases have encouraged more investors to consider commercial shophouses, which are not subject to additional buyer's stamp duty.

Tan added that interest amongst local investors continues to broaden, with about 90% of attendees at his investment seminars being first-time shophouse buyers.

The market also showed signs of recovery in the second quarter. Huttons Asia Pte. Ltd. recorded 16 shophouse transactions worth $193.7m, more than double the value in the previous quarter, helped by several big deals, including three shophouses in Lorong Liput sold for $70m.

Singapore Realtors, Inc. (SRI) also reported that recorded shophouse transactions edged up to 89 in 2025 from 87 a year earlier.

“The ability for transaction volumes to edge up suggests that buyers continue to identify value in well-located and income-generating shophouse assets,” Mohan Sandrasegeran, head of research and data analytics at SRI, said in a February report.

Li said foreign enquiries have increased over the past two to three months, although many have yet to progress into completed purchases.

She said wealthy families and family offices continue to favour established locations such as Club Street, Amoy Street, and Telok Ayer.

Tan expects prices to keep rising because the supply of fully commercial shophouses remains limited at about 3,000 properties, whilst many owners keep them across generations rather than sell.

Li also expects values to remain supported by strong domestic demand, saying gains in Singapore's broader property market typically flow through to commercial real estate.