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Chart of the Day: Freehold shophouse prices slipped 16.5% in 2019

Buyers were less willing to commit to freehold shophouses at higher unit prices.

This chart from Knight Frank shows that the average price of freehold shophouses in 2019 fell 16.5% YoY to $3,427 psf land area, compared to $4,106 psf in 2018. Meanwhile, the average price of leasehold shophouses rose to nearly $600 psf.

“The transactions in Q4 2019 seemed to indicate that buyers were less willing to commit to freehold shophouses at higher average unit prices,” the report stated.

At the same time, some 103 caveats were lodged in 2019 for freehold shophouses, whilst 15 caveats were lodged for leasehold shophouses. The report noted that leasehold shophouses have a higher yield and investors are unlikely to sell them off.

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