Shophouse market continues to soar in 2021: report
Recovery in H2 2020 was fueled by interest from buyers as the economy opened.
The shophouse market will be vibrant in 2021 despite a dip in market activity in H1 2020 due to the pandemic.
According to a report by Knight Frank, the total shophouse transaction value may have decreased by 3.8% YoY in 2020, but the property consultancy firm noted that sales rebounded in Q4 and it even surpassed pre-pandemic levels. Q4 2020 saw a total of 51 shophouse transactions, 19 more than in Q3.
The report said the pen-up demand from first-time investors as well as family offices and corporates, aided by lower costs of borrowing and high liquidity in the market, contributed to the overall recovery of the shophouse market in the last quarter of 2020.
“While shophouse transaction volume in 2021 is expected to be greater than 2020, price increases are likely to stabilise due to buyer’s resistance and present cautiousness in light of the still nascent and tentative economic recovery,” the property consultancy firm said.
The consultancy firm also predicted that once the distribution of vaccine is rolled out, investment sentiment will be boosted and historical shophouses that are no longer being built will continue to be a sought-after heritage asset in modern Singapore.