Condo maintenance fees set to rise as costs increase
Residents at the recently built Dairy Farm Residences complained that their annual maintenance fee was 200 per cent more than what was originally estimated during the initial marketing of the project.
Media reports indicate that some residents with two- or three-bedroom apartments payed fees of up to S$700 monthly. It was originally advertised as being up to S$350 per month. A petition with more than 600 signed was filed in October.
United Engineers said that in November, it had reduced its maintenance fees by approximately 40 per cent following the outcry from residents.
The Minton’s 1,145 units were completed in Hougang in 2015. Homeowners paid a monthly MF fee ranging from S$215.60 up to S$282.80.
Currently, the MF fees range from S$227.15 a month to S$297.95 a monthly, and the SF fee ranges between S$53.90 a S$70.70. Maintenance fees are around S$281.05 – S$368.65 per month, a rise of 30.4 percent from the initial price.
In the last two years alone, water prices will rise by 18%. Electricity tariffs will rise by 3.7 per cent on average in the fourth quarter 2023.
Condo fees are divided into two funds: a Management Fund (MF) that covers the day-to-day expenses of running a condo, and a Sinking Fund (SF) to cover capital expenditures such as repairs or new facilities.
Owners’ actual fees are determined by their share of the property. This is based on unit size. Condos’ size, age, and type of facilities as well qualitative factors like the design and layout are also important.
In five years the entry-level salary is set to rise by 48 per cent, from S$2,210 at 2023 to S$3,260 at 2028.
The National Wages Council has also proposed that in October, workers who earn a monthly gross wage up to S$2,500 (the threshold for the 20th percentile salary level) will receive a 5.5% to 7.5% pay rise.
Costs for electricity and water have also increased.
The fees have been increased to reflect the new projects . Owners in Normanton Park’s 1,862 units, who were granted a temporary occupation permit earlier this year, are required to pay up S$333.75 per month as a management charge.
The Business Times checked and found that, without the GST, the estimated monthly fee for some of the new condos released this year was between S$270-S$650. The amount may change. It is not finalised until the project receives its TOP.
The sinking fund contribution will increase as the project ages to pay for replacements or improvements to its facilities.
Although the estimate could be slightly less than the final price, the Building and Construction Authority must approve the difference.
It is not uncommon for the final fee to be higher that the original estimate. Costs, especially in the area of manpower, grew unexpectedly during pandemic. And delays affected cost-provision estimates.
The Grand Dunman project, which has 1,008 units and a maintenance fee of S$270 a month for units less than 538 sq ft (sq ft), is one of the new projects that have been launched this year. The fee is S$540 and above for units larger than 2,691 sq. ft. The Tembusu Grande has 638 units. The estimated monthly fee ranges from S$325 per month for one-bedders to S$585 a month for five-bedroom penthouses.
For the 268 units in Sceneca Residence the estimated rent ranges from S$293 per month for an apartment with one bedroom to S$560 per month for penthouses with four bedrooms.
As the cost is distributed more widely, larger projects with more units charge lower fees than projects with similar facilities and fewer owners. The fees are rising due to inflationary forces, labour cost increases and other business costs.
Location alone does not make a difference in the cost of projects.
The high cost of facilities is what drives up the fees for some projects. Imagine a building with less than 100 apartments, yet with high-end features like a cinema or bowling center. Monthly maintenance costs for such specialized amenities are high.
Over the last decade, maintenance fees have increased at private condominiums. They are expected to continue increasing, as materials, labour and utility costs rise along with inflation.
In the last decade, fees for private homeowners have increased – up to 30% in some condos. In some older luxury condominiums, owners pay up to S$2,000 each month.
Owners are responsible for the maintenance and management of common areas, including swimming pools, fitness centers, landscaped greenery, security, and landscaping.
Market analysts attribute the constant rise in fees due to an increase in manpower costs and material costs. They also cite higher prices for contracts such as security, cleaning, and landscape services. With the new progressive wage model in place, maintenance costs are expected rise further in the upcoming year.
The model is designed to be a salary ladder for certain low-wage sectors, including cleaning, security and landscape services, lifts, escalators and waste management. As an example, starting in July, salaries for up 3,000 waste management workers will increase, with increases occurring every year over a six-year period.