Land betterment charge rates marginally increased for residential properties

JLL’s Tay believes weaker manufacturing performance is most likely factored right into the decision to keep LBC prices the same for commercial estates. Production result growth slowed down to 1.1% y-o-y in 3Q2022 and also contracted by 2.6% y-o-y in 4Q2022, ending nine successive previous quarters of growth. Tay adds that the most recent LBC assessment might have even considered the “tepid interest” seen for industrial government land sale plots coming before the assessment.

Sectors with the largest increases include sector 99 (Pasir Ris, Loyang, as well as Changi), sector 100 (Tampines Road, Hougang, Punggol and Sengkang), as well as sector 58 (Bukit Timah, Central Expressway, Balestier Roadway, Tessensohn Roadway plus Race Course Road).

LBC fees for the hotel as well as hospitality group were increased by 1% on average, the very first increase implemented since March 2019, adds Edmund Tie’s Lam. Eighteen out of the 118 sectors saw a rise in LBC prices ranging from 4% to 10%, with the remaining 100 sectors observing no change.

For the home, non-landed usage group, LBC costs increased by 0.3% generally, a sharp distinction from the 12.9% increase throughout the last assessment in September 2022. Thirteen out of 118 geographical sectors observed up revisions, which varied from 2% to 5%, while the lasting 105 sectors saw no change.

Sector 97 (covering Bedok South Avenue, New Upper Changi Roadway, Bedok Road and even Upper East Coast Roadway) noticed the biggest rise of 5%. “The head valuer possibly associated the boost in land values to the cumulative sale of Bagnall Court early this year, in addition to the announcement of more targeted environment-friendly spaces in the Bayshore development, which will boost the liveability of home rooms,” claims Lam Chern Woon, Edmund Tie’s head of research as well as consulting.

The little revision for this user group lines up with the stabilising price growth seen for landed houses alongside reducing sales activity, claims Tay Huey Ying, head of research also consultancy, Singapore at JLL. Caveats lodged for landed houses for the past 6 months dropped by nearly 50% from the preceding duration, while URA’s price level for landed houses boosted by just 0.6% q-o-q in 4Q2022, compared to a quarterly standard of 2.3% in 2Q2022 and 3Q2022.

For the landed residential purpose group, typical LBC rates increased by 0.4% (versus a hike of 10.2% in September 2022). Twelve sectors saw boosts ranging from 3% to 4%, while the remaining 106 sectors saw no change.

The Singapore Land Authority (SLA) has recently introduced the revision of land betterment charge (LBC) costs from March 1 to Aug 31. The review is executed half-yearly in consultation with the main valuer of the Inland Revenue Authority of Singapore.

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Most use groups saw LBC prices the same, including commercial and industrial usage groups, while residential, in addition to the inn as well as medical facility use groups saw low boosts.

Tricia Song, head of research, Southeast Asia at CBRE, adds that other sectors that saw rises were actually those that have observed a shared sale or Government Land Sale (GLS) tenders.

Talking about the unchanged LBC rates for business real estates, CBRE’s Song monitors this follows the lack of expensive workplace purchases in the marketplace. She adds:” Our team believe this indicates the state’s sight of the flexibility of industrial real estate worths, despite higher financing expenses and macroeconomic uncertainties.”

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