Savvy Investors Look to Shophouses as a Safe Haven for Investment as Prices Fall.
Market Review :
Total shophouse transaction values amounted to S$253.2 million in H1 2020, a 47.1% decline as compared to the second half of 2019 as the Coronavirus Disease 2019 (COVID-19) constrained economic activity and dampened sentiments.
Average unit prices for freehold shophouses declined by 32.7% on a half-yearly basis to S$2,692 per square foot (psf) on land in H1 2020, while prices for leasehold shophouses dropped by 30.2% year-on-year (y-o-y) to S$3,591 psf on land (Exhibit 1). With the moderation in prices, savvy investors purchased these shophouses as a safe-haven for their investments.
H1 2020 saw 52 shophouse transactions, a dip from the 65 lodged in H2 2019 (Exhibit1). Transaction volume in the second quarter of 2020 fell below normal levels amid the circuit breaker with 20 recorded shophouse sales.
Knight Frank Indonesia
Chase Plaza 17th Floor
Jalan Jendral Sudirman Kav 21
Jakarta, 12920 - Indonesia