2025 in Review: Shophouse Market Milestones & What’s Next in 2026

2025 has been a year of resilience and subtle resurgence for Singapore’s shophouse market.

After a quiet period, investor sentiment has started rebounding, and the dynamics of demand, transaction volume, and buyer profile have shifted.

As we close the year, here’s how 2025 unfolded and what to keep an eye on heading into 2026 with PropNex Shophouse Elites watching closely.

What Happened in 2025?

• Strong rebound in Q3: The third quarter saw a sharp recovery, with 27 caveated shophouse deals recorded. That’s up from 18 in Q2, making it the most active quarter in nearly two years. Total transaction value jumped to S$210 million, a 65.3% increase quarter-on-quarter.

• Growing interest driven by macro shifts: The resurgence has been supported in part by a more stable interest-rate environment, improved overall economic outlook, and Singapore’s ongoing appeal as a safe-haven real estate destination.

• Leasing demand still holding up with caution: While shophouse leasing demand remains generally stable, rising operational costs for some tenants (especially in F&B) could limit rental upside and influence leasing decisions. 

Beyond the data, 2025 saw a subtle shift: heritage shophouses are increasingly viewed not just as nostalgic assets, but as strategic investments that blend cultural value with practical appeal for long-term wealth preservation.

Emerging Investor Behaviours & Market Sentiments

This year, several interesting trends have emerged among shophouse investors:

• Return of confidence: As borrowing costs eased and economic sentiment steadied, investors returned. The Q3 rebound is a clear sign that some saw 2025 as a market reset rather than a downturn.

• Safe-haven appeal and long-term mindset: Many buyers are looking beyond short-term gains. The finite supply of heritage shophouses, combined with Singapore’s stable regulatory environment, has reinforced the asset’s appeal for preservation and wealth protection.

• Selective, value-conscious purchases: In earlier quarters of 2025, a number of smaller-timber deals (below S$5 million) dominated, possibly reflecting caution among investors in a still-uncertain macro climate. 

• Cautious optimism in leasing market: While demand for leasing persists, some tenants, especially in sectors sensitive to costs like F&B are weighing rising expenses, which could moderate rental growth expectations. 

All in all, 2025 demonstrated that shophouses are still seen as more than heritage pieces — they’re strategic, long-term bets blending stability, exclusivity, and legacy potential.

What to Watch in 2026: Key Signals & Forecast

Looking ahead, a few factors could shape the trajectory of the shophouse market in 2026:

• Macroeconomic stability & broader real-estate trends: With overall Singapore economic forecasts stabilising and global capital market volatility easing, demand for tangible, defensive assets like shophouses may remain robust. 

• Continued limited supply + heritage appeal: The scarcity of heritage shophouses continues to support long-term value, especially among investors focused on capital preservation over cycles.

• Selective leasing demand, especially from lifestyle / boutique segments: As retail and lifestyle sectors recover post-pandemic, we could see renewed demand from boutique F&B, creative studios, and experiential retail — making heritage shophouses attractive for operators seeking character and exclusivity.

2025 may not have been a blockbuster surge for the shophouse market, but it served as a reset. The rebound from Q3 signals renewed investor confidence, while market behaviours suggest a maturing phase: more selective buying, emphasis on heritage value, and a long-term holding mindset.

As we move into 2026, the players who stand to benefit most are those with patience, clear investment goals, and a focus on value preservation. For investors seeking stability, heritage charm, and legacy-value, shophouses remain a rare proposition.

Planning to explore opportunities or evaluate shophouses in 2026?

The PropNex Shophouse Elites team stays on top of market shifts and ready to help you navigate and identify what fits your investment horizon best. Get in touch with us today!