Arguments for fairness in the property trade

DEVELOPERS’ profit margins have thinned considerably over the years, from up to a fat 50 per cent in the “super bull” run of 2007-2008 to margins in the low teens today. Recent macroeconomic chills from inflation and higher interest rates have added to demand dampeners from various iterations of market cooling measures.  

There is also one largely unseen component of developers’ costs - the land betterment charge paid to the government in return for enhanced land use in building up a site. 

Since 2007, the formula used for calculating the charge creams off 70 per cent of the potential appreciation in land value. The higher charge, up from 50 per cent previously, was meant to achieve a “more equitable sharing of gains between landowners and the state”, the government said. At the time, Singapore’s property market was firmly bullish, with an en bloc sale party pumping.