Will lower LBC rates in the CCR boost en bloc sales?
Sector 43 recorded the largest LBC drop for non-landed homes at 19.2%.
Despite a drop in LBC rates for non-landed residential properties in the Core Central Region (CCR) from March to August, real estate experts remain sceptical about a boost in en bloc site interest.
According to Huttons, the Additional Buyer's Stamp Duty (ABSD) hike for foreigners to 60% remains "the biggest hurdle to a successful en bloc as the replacement home for foreigners is prohibitively expensive."
CBRE shared a similar sentiment, saying that whilst the significant drop in LBC rates may encourage more prime residential collective sales, the punitive ABS rates are still “quite daunting and developers are likely to continue to tread with caution. “
Data from the Singapore Land Authority (SLA) showed that Sector 43 (Cuscaden Road/ Tomlinson Road/ Tanglin Road) recorded the largest decrease in the LBC rate, dropping 19.2%.
Sector 43, according to Huttons, is the “Orchard Boulevard area where a recent GLS parcel was sold at $1,617 psf ppr, which was much lower than the previous land sale at Cuscaden Road in the area in 2018.”
Huttons noted that sectors surrounding Sector 43, such as Sectors 39 to 45 and 67, also saw LBC rates adjusted downwards by between 11.4% and 18.8%.
Meanwhile, Sectors 1 to 14 saw LBC rates moving southwards by 4.8% to 4.9%.
“It is surprising to see Sector 14 LBC rates declining by 4.8%. The recent GLS site at Marina Gardens Lane was sold for $1,402 psf ppr. By adjusting LBC rates down, the government may be sending a signal that the value of land in Sector 14 should be higher,” Huttons said.
CBRE noted that “sectors which saw state land tenders that received lacklustre interest with bid prices at the lower end of market expectations observed a decrease in LBC rates.”