Huttons Real Estate Group’s senior research director Lee Sze Teck said: “There are lesser restrictions on ownership for commercial shophouses … (even if) you buy a second one. Moving forward, we think there will be increasing interest in the shophouse market.”
For a shophouse with mixed commercial and residential use, however, the residential component is still subject to ABSD for foreign investors. This also applies to local buyers who already own a residential property in Singapore.
Furthermore, Singaporeans, permanent residents and foreigners are all subject to the buyer’s stamp duty (BSD) of up to 6 per cent for the residential component and up to 5 per cent of the commercial component of the shophouse.
LIMITED SUPPLY
Market watchers said a limited supply of such properties has also led owners to raise prices due to higher offers from buyers.
With just about 6,500 conserved shophouses in Singapore, the quantity is not enough to meet the appetites of investors.
“The main attraction of shophouses is scarcity,” said Mr Lim. “Shophouses are seen as a limited supply asset. They are seen as a good form of capital appreciation as well as wealth preservation.”
About 60 per cent of these shophouses are located in central areas like Rochor, Outram and Downtown core, which command higher prices.
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