Shophouse market sees rebound with 32.7% rise in H2 2024 sales

The average unit price during the period surged 186.2% to $6,595 psf on land.

Shophouse sales volume slightly improved in H2 2024 with 47 transactions worth $504.5m, representing a 32.7% increase from H1 2024, Knight Frank reported.

The average unit price surged 186.2% to $6,595 psf on land in H2 2024 from $2,305 psf on land in H1 2024. 

This increase was due to the institutional sale of the leasehold The Rail Mall comprising a land area of 105,563 sf (inclusive of carpark lots) for $78.5m by Paragon REIT in June 2024 that set a low base for the average unit price in H1 2024.

Freehold shophouses were the popular choice amongst investors and buyers during the period with 41 of the transacted units being freehold. Meanwhile, leasehold shophouse transactions dropped 61.7% in total sales value to $39.4m.

“Compared to the past few years, the shophouse market in 2024 was quieter, as caution among buyers and patient sellers led to a decline in sales activity,” Mary Sai, executive director at Knight Frank said.

According to Knight Frank, despite the series of interest rate cuts announced from September 2024 onwards, the sentiments of shophouse buyers and investors remained careful and cautious, growing increasingly resistant to further increases in asking prices from vendors, who in turn are fully cognisant of a shophouse’s investment potential over time.  over time.