Shophouses get a chance in market hit by property curbs

These properties could stand out as investments in homes lose their shine, an analyst said.

Shophouses could have a chance amidst a property market disturbed by property cooling measures. Transactions smashed a five-year record in the first quarter of 2018 when they jumped 281% YoY to a total value of $478.6m.

JLL Singapore head of research and consultancy Tay Huey Ying noted that the government's swift response to curb home price growth has tampered the prospects of residential properties as attractive investments.

“Investors looking for alternatives to park their money could divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances,” she added.

Tay added that strata offices could also benefit from the effects of the cooling measures on the market. In a previous statement by OrangeTee & Tie, shophouses were also seen as potential safe havens for investors, aside from industrial properties and commercial buildings.

“We feel the additional measures have been introduced too hastily coming just after 9.1% growth in PPI over four quarters,” Tay added. “The market should have been given a chance to find its own level in response to the expected surge in launches in coming months.”