Knight Frank Singapore has announced revised land betterment charge (LBC) rates effective from 1 March 2025. The commercial LBC rates have increased by 0.6%, affecting 22 out of 118 sectors, with notable increments in areas such as Orchard Road, Stamford Road, and River Valley. This adjustment follows a previous 1.5% increase six months ago.
The rise in commercial LBC rates is attributed to increased prices of strata commercial properties in key areas like City Hall and Bugis, as well as heightened sales activity in the Rochor Planning Area due to the launch of One Sophia in November 2024. Leonard Tay, Head of Research at Knight Frank Singapore, noted that small business owners and non-institutional investors are keen on boutique office spaces in central locations.
For landed residential properties, the LBC rates have risen by 2.9% across all sectors, despite a 1.6% decrease in the URA Price Index for landed homes from March to December 2024. Tay expressed surprise at this increase, questioning the rationale behind it given the government’s previous cooling measures aimed at stabilising housing prices.
In the non-landed residential sector, the LBC rates saw a minimal increase of 0.3%. Developers have been cautious with land tenders, and the collective sales market remains subdued, with only a few successful enbloc projects like River Valley Apartments.
The hotel sector experienced a 0.6% rise in LBC rates across 13 sectors, driven by growing investor interest and a return to pre-pandemic tourist levels. Meanwhile, the LBC rates for places of worship and community buildings increased by 5.8%, marking the first adjustment in over a decade.
These changes reflect ongoing shifts in Singapore’s property market, with implications for investors and developers navigating the evolving landscape.
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