In the first quarter of 2025, shophouse sales experienced a dramatic decline, with total transaction values dropping by 43% compared to the previous quarter. The total value of sales plummeted from $175 million in the fourth quarter of 2024 to approximately $100 million in the first quarter of 2025. This marked a significant downturn in the market, prompting concerns among investors and industry observers alike.
The decline in the shophouse market was further evidenced by the number of transactions, which fell to 19 in the first quarter of 2025. This represented a 21% decrease from the 24 transactions recorded in the preceding quarter and a 17% decline compared to the 23 deals completed in the first quarter of 2024. Such figures suggest a market that has become increasingly hesitant, with a growing number of participants choosing to remain on the sidelines rather than engage in buying or selling activities.
Market analysts point to external factors, particularly geopolitical tensions and the looming threat of potential US trade tariffs, as key contributors to this cautious sentiment. The uncertainty surrounding these geopolitical issues has led to a notable decline in investor confidence, resulting in a mismatch between buyers’ and sellers’ pricing expectations. As the market grapples with these challenges, many investors appear to be adopting a wait-and-see approach, further stalling activity in what was once a vibrant sector of real estate.
Interestingly, the data indicates a shift in the types of transactions taking place during this downturn. In the first quarter of 2025, 58% of shophouse transactions were priced below $5 million. This trend suggests that while larger deals have become increasingly rare, smaller transactions are still occurring, albeit at a reduced volume. The shift could be indicative of a more conservative investment strategy among buyers who are more cautious in the current economic climate.
One of the notable transactions during this quarter was a shophouse in Telok Ayer that sold for $14.8 million, equating to $12,488 per square foot. Despite being the most expensive sale of the quarter, such high-value transactions are becoming less common, as seen in the overall decline in transaction volume and value. The market is shifting away from big-ticket purchases, reflecting the broader uncertainty that has permeated the sector.
As shophouse sales continue to face challenges in the wake of geopolitical instability and cautious investor sentiment, the outlook for the coming quarters remains uncertain. Industry stakeholders are left to ponder whether this decline is a temporary blip or a more sustained trend that will reshape the landscape of shophouse transactions. With ongoing economic and political developments, the market will need to adapt and respond to these evolving circumstances to restore activity and confidence in the sector.
NEW CONDO LAUNCH: SPRINGLEAF MODERN
Springleaf Modern is a newly launched condominium offering modern living spaces tailored for urban dwellers.
This development features a variety of unit types ranging from one to four-bedroom apartments, ensuring it meets the diverse needs of individuals and families.
Residents can take advantage of amenities such as a swimming pool, fitness center, and landscaped gardens, all designed to promote wellness and relaxation.
For detailed information, including the Springleaf Modern Floor Plan and pricing, prospective buyers can view the Springleaf Modern E-brochure.
View SPRINGLEAF MODERN ShowFlat & Get VVIP Discount. Register or contact 6100 8822 to book showflat appointment.
News Source: Edgeprop
Images are not actual photos. For illustration purpose only.