Land betterment charge rates marginally increased for residential properties

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

JLL’s Tay believes weak production performance is likely factored into the decision to maintain LBC rates the same for industrial properties. Production outcome progress reduced to 1.1% y-o-y in 3Q2022 and acquired by 2.6% y-o-y in 4Q2022, ending nine consecutive prior quarters of development. Tay adds that the latest LBC assessment can have also taken into consideration the “tepid interest” seen for commercial state land sale plots preceding the review.

Several use groups viewed LBC rates unchanged, consisting of commercial and industrial usage groups, while home, in addition to the inn and health center usage groups saw limited boosts.

Sector 97 (extending Bedok South Avenue, New Upper Changi Road, Bedok Road and Upper East Coastline Road) noticed the largest boost of 5%. “The principal valuer possibly connected the boost in land worths to the combined sale of Bagnall Court early on this year, along with the news of more intended green rooms in the Bayshore development, which will certainly enhance the liveability of residential areas,” states Lam Chern Woon, Edmund Tie’s head of research and consulting.

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

Commenting on the unmodified LBC rates for industrial real estates, CBRE’s Song monitors this follows the absence of big-ticket workplace deals on the market. She adds:” We believe this signifies the government’s view of the strength of business property worths, in spite of higher funding expenses and also macroeconomic uncertainties.”

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

For the residential, non-landed use group, LBC prices raised by 0.3% on average, a sharp distinction from the 12.9% hike in the course of the last evaluation in September 2022. Thirteen out of 118 geographical sectors found up modifications, which ranged from 2% to 5%, while the standing 105 sectors saw no adjustment.

The tiny revision for this user group straightens with the stabilising cost growth monitored for landed residences together with reducing sales event, claims Tay Huey Ying, head of research study and consultancy, Singapore at JLL. Caveats lodged for landed homes for the past 6 months dropped by nearly 50% from the previous period, while URA’s price level for landed houses increased by simply 0.6% q-o-q in 4Q2022, contrasted to a quarterly average of 2.3% in 2Q2022 and 3Q2022.

For the landed residential purpose group, typical LBC rates boosted by 0.4% (versus an increase of 10.2% in September 2022). Twelve sectors saw increases varying from 3% to 4%, whilst the remaining 106 sectors saw no change.

LBC rates for the hotel as well as friendliness group were raised by 1% on average, the initial boost carried out as March 2019, includes Edmund Tie’s Lam. Eighteen out of the 118 sectors saw a boost in LBC rates varying from 4% to 10%, with the standing 100 sectors finding no change.

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