Investors eye Singapore shophouses amidst easing rates, property policy shift

Cuts to U.S. rates and new local stamp duty rules drive renewed shophouse demand.

Easing interest rates and recent policy changes are prompting investors to return to Singapore’s shophouse market, drawn by its stability and long-term value, according to the Shophouse Market Report for Q3 2025 by PropNex Research.

According to the report, investment demand for shophouses is expected to remain resilient, supported by the safe-haven appeal of Singapore. The scarcity and heritage value of shophouses also make them ideal for investors seeking more defensive assets that are perceived to better retain value over time.

Sales momentum in the commercial shophouse market rebounded in Q3 2025, supported by a recovery in sentiment amongst both buyers and sellers.

There were 27 shophouse transactions in Q3 2025, up by 50% QOQ from the 18 deals in Q2 2025. Year-on-year, the sales volume in Q3 2025 similarly rose by 50.0% from the 18 deals in Q3 2024. As the caveats for some transactions may not have been lodged, the actual sales figure for Q3 may be higher

Q3 shophouse deals in Q3 2025, the highest quarterly sales in about two years, amounted to $210m, marking a 65.3% increase in value compared with the previous quarter. Sales value was up by about 51.3% YOY from $139m in Q3 2024.

In July 2025, the Singapore government announced revisions to the Seller’s Stamp Duty (SSD) for private residential properties. This change may prompt some investors to shift their focus towards the commercial property market. Notably, commercial properties, including shophouses, are not subjected to both the SSD and the additional buyer’s stamp duty (ABSD).

In September 2025, the US Federal Reserve cut interest rates for the first time in 2025, and it was also the fourth cut following 11 rate hikes since March 2022.

Due to downside risks to growth and a softening labour market in the US, some analysts anticipate further rate cuts by the US Fed in the last quarter of 2025.

Looking ahead, PropNex said it anticipates that several factors could support both shophouse values and rental demand. These include a positive economic growth outlook and the continued resilience of the tourism sector, buoyed by a robust lineup of sporting, entertainment, and MICE (Meetings, Incentives, Conferences, and Exhibitions) events.

However, there are still headwinds due to macroeconomic uncertainties, alongside the ongoing trade frictions between the US and China could potentially weigh on business outlook and shophouse yields. PropNex said investors often gravitate towards defensive asset classes in uncertain times, and the shophouse segment could stand to benefit should there be a capital flight-to-safety.

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