The rates for land betterment charges (LBC) in Singapore have been considerably raised for commercial, residential, and industrial needs. Among all, the rates for non-landed residential properties are experiencing the highest rise due to robust property market conditions in Singapore. It is further influenced by healthy bids for collective sale sites and state-owned lands. The developers are paying LBC which further replaced the need for development charges and this scenario is improving the utilization of available sites while opening doors to create bigger projects on them.
The rates for LBC are increasing by 12.9% for various non-landed residential use properties; however, they increased by 10.2% for landed residential units. On the other side, for commercial use sites, the estimated rise was 5.4% on average; while it was 2.3% for industrial use properties.
The head of the research department at Cushman & Wakefield revealed that this sudden hike in LBC rates for several property segments in Singapore further reflected higher rates in commercial, residential, and industrial markets in comparison to the previous six months.
It leads to the strong interest of investors in the property market in Singapore, even after huge global economic uncertainty. Also, the rents in the residential, commercial, and industrial markets are influenced by this scenario.
The LBC rates for non-landed residential use properties have been increased by an estimated rate of 12.9% which shows a 0.3% hike in comparison to the previous March month rates. Analysis reveals that the enthusiastic land bids for various Government land sales sites are followed by a strong influence of major new launches in the market, and this trend is growing even after the latest cooling measures and higher unit prices.
The head of R&C in the Singapore real estate market recently said that a 12.9% rise in property prices is possibly the sharpest hike since the 22.8% spike observed in March 2018. He said that it came as a surprise when bids of the developers were measured in terms of slowing economic growth and soaring interest rates. Furthermore, the LBC rates for various non-landed residential use properties were increased in 116 geographical sectors by almost 6% and 20%; while the two remaining sectors are experiencing no change.
The highest rise of 20% is linked to Sector 113 which includes Choa Chu Kang Road, Jurong West Avenue 2, Upper Bukit Timah Road, Bukit Panjang, and Bukit Batok areas. The head of research at CBRE, Tricia Song, recently recalled the collective sales of Park View Mansions at $260 million and Lakeside Apartments at an estimated price of $273.89 million for being the most influential ones ahead of Jurong Lake District.
Along with this, the executive condominium GLS site at Bukit Batok West Avenue 8 experienced a huge bid of $661.67 psf ppr; which was another big record in the EC land sale. On the other side, the landed residential use sites further had a hike of 10.2% which is the steepest in past 11 years.