URA revises development charge rates
Government policy expected to produce a more moderate collective sales market over the short term.
The revision of the development charge rates for the period from 1 September 2010 to February 2011 has indicated that both Group B1 (Residential (Landed)) and Group B2 (Residential (Non-Landed)) has increased on the average of 13%.
The impact of the Circle Line, particularly on sectors 103(Braddell/Potong Pasir/Bartley/Upp Aljunied/Woodleigh) and 104 (Bishan/ Ang Mo Kio) has also been factored into the DC revision. These sectors recorded strong increases of approximately 20% for the (Residential (Landed)) use group while (Residential (Non-Landed)) use group saw an increase of about 15.6% each. The Commercial use group for sectors 103 and 104 also registered increases of 7.5% and 7.3% respectively, according to a Kones Lang LaSalle report.
The increases registered by these two sectors are higher than the islandwide averages.
Dr Chua Yang Liang, Head of Research for South East Asia, Jones Lang LaSalle said “While more station boxes along the Circle Line complete during the next few quarters, we can expect similar increases in DC rates around them. The direct impact on the property market is minimal other than in redevelopment cases where DC rates are imposed. Nonetheless with the recent government policy, we can expect a more moderate collective sales market over the short term.”
From the commercial use group, the average increase was calculated to be approximately 1%. One significant increase was that of sector 112 (West Coast Road/ Jurong East), where an increase of 25% was recorded. This increase is supported by the strong interest by Lend Lease in Jurong Lake District when they bid for the mixed development site at Jurong Gateway Road for $650 per sq ft per plot.
On the industrial front, an islandwide increase of 10% was recorded with the highest achieved in sector 115 (Sembawang/Mandai/Woodlands). This is predominantly driven by strong activity in the government land sales market as well as the positive outlook for the industrial market in Singapore.
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