Condo maintenance fees will increase in future as costs rise
In general, projects with larger units and more owners charge lower fees. This is because the costs are spread more widely. However, fees are increasing due to inflation and increases in business costs such as utility bills, wages and labour.
It is not necessary that fees for projects in central locations are higher than other areas just because they are located there.
Some of the highest-priced facilities are responsible for higher fees. Take, for example, a small development that has fewer than 100 homes but is equipped with high end facilities such as a movie theater or bowling centre. Monthly costs are associated with maintaining such high-end amenities.
The Business Times conducted checks and found the estimated monthly maintenance fees for some new condominiums launched this past year to range between S$270 and S$650 per month, excluding GST. This amount is subjected to change.
The contribution to a sinking fund will grow as a project grows older to pay to replace or upgrade its facilities.
It is possible that the estimate will be slightly lower than what the Building and Construction Authority has approved, but it should not be an important difference.
Market watchers attributed this steady increase to the increased costs of manpower, materials, and contracts for landscape, security, and cleaning services. In the future, the PWM will likely increase the cost of maintenance.
The model is wage ladders for certain lower-wage areas, like cleaning, landscape, lifts and elevators, waste management, etc. In July, for example, up to 3,00 waste-management workers’ salaries will be raised, and they will do so in six-year increments.
From S$2,210 per year in 2023, to S$3,260 by 2028, the average entry-level wage will grow 48 percent.
Condo fees include payments to a management (MF) fund that caters for day-today operations expenses and a sinking (SF) fund which is used for capital expenditures like repairs and new amenities.
Owners pay fees based on the value of their shares in the property. This value is tied to the size of each unit. The size, age and quality of the condo as well other factors such design and layout make a big difference.
The Minton is a 1,145 unit development that was completed in Hougang, Singapore in 2015. The homeowners paid an MF of S$215.60 – S$282.80 each month.
Today, the MF is S$227.15 – S$297.95 a year, while the SF ranges from S$53.90 – S$70.70. In other words, homeowners pay maintenance fees of S$281.05-S$368.65 each month – a jump of 30.4% from the original price.
In October, National Wages Council suggested a 5,5%-7.5% pay hike for those earning up to S$2,500 per month gross – that is the threshold for the 20th centile wage level.
Electricity and water rates have also risen.
The price of water has increased 30 percent in just two years. It is expected to rise another 18 percent over the next couple years. For the fourth-quarter of 2023, electricity prices will rise on average by 3.7% from the previous period.
Residents of Dairy Farm Residences, a newly-built project in the city, have been criticised for claiming that their maintenance fees are up to 200% higher than they were originally estimated at the time when it was initially marketed.
According to reports in the media, some residents who own two-to-three-bedder units payed over S$700 a monthly fee. Initial marketing suggested that fees could reach up to S$350 each month. A petition was submitted in October with more 600 signatures.
United Engineers has announced that maintenance fees have been reduced by about 40% following residents’ protests.
It’s not unusual for the final bill to be more than the original estimate. During the pandemic phase, costs rose unexpectedly. And delays affected cost-provision estimates.
For units measuring 538 square foot (sq. ft.) or less, the estimated monthly maintenance fees for the Grand Dunman’s 1,008 units are S$270. The maintenance fee for units with a floor area of more than 2,691 sq ft is S$540. Monthly fees at the Tembusu-Grand, a 638-unit development, range from S$325 to S$585 depending on the number of bedrooms.
The estimate for Sceneca Residence’s 268 units ranges from S$293 monthly for a one bedroom unit to S$560 monthly for a penthouse with four bedrooms.
Private condominium maintenance fees have been increasing over the last ten years. This is due to rising labour, material and utility costs.
These fees have risen by up to 30 percent in some condominiums over the past decade. Owners of older luxury condos are paying as much as S$2,000 a monthly.
The owner pays a fee to cover costs for maintaining and managing common areas and amenities of the property. These include swimming pools and fitness facilities as well as landscaped greenery.