Mr Derrick Goh asked the Minister for National Development given high investment demand by wealthy foreigners for local shophouses (a) what is the Government's assessment of the potential impact of higher shophouse prices on the wider property market and Singaporeans in general; (b) whether restrictions for foreign purchases, as with the residential market, will be considered to moderate demand and asset price inflation given increasing foreign fund inflows buying limited supply of local shophouses; and (c) whether local business tenants will be assisted to cope with rising shophouse rents.
Mr Desmond Lee: Shophouse spaces make up 9% of the total stock of office and retail space in the market as of 1Q2024 and its impact on the wider property market is minimal. In addition, shophouse sale transaction volume and total sale transaction value have fallen significantly over the last two years. Over the past five years, more than 80% of shophouse purchases were by local companies and individuals.
Apart from shophouses, businesses can also rent spaces in other types of commercial properties, which include retail and office spaces in conventional commercial buildings, like malls and office buildings. There is also ample supply of retail and office space coming onstream over the next few years to cater to demand.
Nevertheless, the Government will continue to monitor the property market and adjust our policies, as necessary, to promote a stable and sustainable property market.
