Amidst better buying sentiments in the local property market, the Ministry of National Development (MND) has announced increment the of development charges (often known as DC Rates) for the different sectors f the real estate in Singapore. These development charges for levied by the government for the purpose of enhancing the use of selected land parcels or even building bigger developments on it.
When interviewed, many industry analysts were not surprised by the increment in the rates. According the Ministry of National Development, the development charges for selected uses such as landed residential, place of worship or civic and community institution and other use groups – will remain unchanged.
On average, the development charges for commercial uses were raised by 1.3%, with the largest increase of 29% for areas like Raffles Quay, Shenton Way and Marina Bay Financial District. I personally think that this was because of the recent interest in commercial real estate at Central Boulevard in Marina Bay which saw the record $2.57 billion bid for a white site or mixed-use site.
For the private residential segment, condominium development charges saw an increase of an average of 4%, with the highest increase of 17% for areas such as the Jalan Besar, Serangoon Road, Balestier Road and Bendemeer Road. This is also very likely because of the the recent land bid which saw the site at Perumal Road and another at 1177 Serangoon Road going for premiums over their initial value right, with many saying that SL Capital’s Sturdee Residences will now see upside potential.
Besides, the surprise for the hotel and hospital, was that the development charges for them were also increased by 2.6% on average with the steepest rise of 19 per cent in several suburban locations, including Punggol and Lornie Road – All these given that there were no hotel transaction in the over the last six months.
So everything up, nothing down?
For the industrial uses, the development charges were cut over 3.7% on average – with the largest drop seen in areas like Tampines Road, Boon Lay and Tuas. Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia – “(It is) in line with the market conditions… Industrial prices and the occupier market have been facing pressure”
The revised rates are said to be effective from 1 March 2017 to 31 August 2017.