In view of the wide-ranging recovery in most segments of Singapore’s property market in the past 6 months, the government has raised development charge (DC) rates for the landed and non-landed residential, commercial and industrial use groups in its latest biannual revision exercise.
The Ministry of National Development has raised DC rates for the landed residential use group by an average of 4.8% and those for non-landed residential use by an average of 0.3% for the March 1-August 31 period this year. The biggest hike of 10% for landed residential use applies to Sector 67 (which includes Nassim, Orange Grove, Ladyhill and Fernhill areas). This could be attributed to the strong demand and prices of Good Class Bungalows in these and other locations in 2021.
The non-landed segment saw a mild increase in DC rate probably because the chief valuer had factored in possible easing of market enthusiasm in light of the December 2021 cooling measures. Developers are expected to remain cautious given the added risks of higher additional buyer’s stamp duty rates, rising interest rates and higher construction costs. The biggest increase of 15.4% is applied to Sector 92 (which includes Guillemard, Mountbatten, Dunman and Tanjong Katong areas). This was most probably due to the sale of the combined private freehold sites at Thiam Siew Avenue at S$1,488 psf per plot ratio (psf ppr) in November 2021), and the site at Jalan Tembusu sold via a state tender at S$1,302 psf ppr in January 2022.
For commercial use group, DC rates have been increased by 0.7% on the average. 29 sectors see a 3% hike (which include the central business district, Chinatown, Boat Quay, Clarke Quay, Robertson Quay, Farrer Park, Bukit Timah Road, Oxley area, Tanglin Road and River Valley Road). Some of the key office deals in the past six months were One George Street, PIL Building, 61 Robinson Road and Robinson 112.
For the industrial use group, DC rates are raised in all 118 sectors by between 2% and 5%. The largest increase is for Sector 114 (Boon Lay/Jurong West/Pioneer/Tuas/Sungei Kadut/Choa Chu Kang/Lim Chu Kang area). However, the hotel use group saw DC rates cut for 25 sectors by between 2% and 10%. The biggest reduction of 10.4% is for Sector 11 (which includes the Marina Bay area), attributable to IOI Properties’ purchase of the Marina View white site (which includes a hotel component) at a lower-than-expected S$1,379 psf ppr.