Volume of resale transactions in prime districts surging by over 50% y-o-y so far in 2024: Huttons Asia
Interest in the shophouse market remained strong in the third quarter of 2024, despite a slight decrease in recorded sales, as reported by Huttons Asia’s latest quarterly shophouse market report on November 12th. While only 18 caveats were lodged for shophouse transactions in Q3, a decline from 21 caveated deals in Q2, the total transacted value of shophouses was still at a respectable $138.9 million. This is a 28.8% decrease from the previous quarter’s $195.1 million, and only about half of the $278.6 million in transactions seen in Q3 of 2023.
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Compared to the same period last year, the number of transactions has dropped by 46.1%, with only 62 shophouses sold in the first nine months of 2024. The total value of transactions for the same period has also decreased by 48.5%, to $519 million.
But despite these less-than-stellar figures, Huttons’ report highlights that a significant number of shophouse deals were not caveated in Q3. According to market sources, multiple shophouses in popular districts such as Districts 1 and 2 were sold, with an estimated total cost of over $70 million. This indicates a strong demand for shophouses, which has picked up in the last few months.
Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that investors are attracted to shophouses for their rareness and potential for strong capital gains. He also believes that the recent interest rate cuts may have contributed to the growing popularity of shophouses as a wealth creation and preservation asset. As such, he expects shophouse transaction volume and quantum to increase in Q4 of 2024.