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Shophouse Prices Jump Even As Rental Yields Decline

Fizah Hatman
Updated

This article was originally on GET.com at: Shophouse Prices Jump Even As Rental Yields Decline

Prices of shophouses in Singapore in the Central Business District (CBD) have gone up drastically in the past two years while their rental yields have been sliding.

One of the reasons for this increase in sale prices is the demand from foreign investors.

The most expensive shophouse sold so far in Singapore could be the one that was recently bought by Mr Zain Fancy of Clifton Partners. This $10.8 million shophouse is located in Ann Siang Road and has a psf of $3,750 in terms of gross floor area (GFA).

Compared to Singapore buyers, these foreign investors are eyeing capital appreciation of such properties, rather than buying them for rental yields.

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Shophouses in Chinatown and Tanjong Pagar have gone up in prices due to this rise in foreign demand.

Today, shophouses with 99-year lease are averaging at least $3,000 psf both in Chinatown and Tanjong Pagar.

However, even though the prices of these shophouses have gone up, their rental yields on the other hand have fallen to less than 3% compared to 7-8% 8 years ago.

According to CBRE, although sales of shophouses declined last year, the overall transacted prices went up by 10%.

Keen To Find A Property?

Shophouse prices might be going up, but you could still find reasonably priced non-landed private properties. Recently, condo resale prices have dropped by 1% and prices of private residential properties went down by 0.7%. Perhaps you can consider looking into buying a private property while the prices are still low.

Looking for a home loan in Singapore? To save time and money, use a home loan comparison site like GET.com to help you make a decision.

Here you can check out the 4 things you can consider when comparing home loans if you want to refinance your home loan.

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