The biggest hikes were recorded in Sector 43 which saw few en bloc and GLS site sold at prime prices.
Development charge (DC) rates across property types have been increased for the September to February period in accordance with the half-yearly consultation with the chief valuer, the Ministry of National Development revealed.
Development charge for condo units will rise by an average of 9.8% as 75 out of 118 sectors increased their rates from 3% to 33%.
The largest hikes of 33% were recorded for the DC rates of areas within sector 43 located in Tanglin Road, Cuscaden Road, Orchard Boulevard, and Grange Road, with rates increasing to $18,200, whilst sector 67 in the areas of Dalvey Road, Stevens Road, Anderson Road, Orange Grove Road, Tanglin Road, Napier Road, and Cluny Road will observe rates spiking to $16,800.
According to OrangeTee & Tie head of research and consultancy Christine Sun, sector 43 saw a few en bloc and GLS sites sold at peak prices, including Park House and the GLS site at Cuscaden Road.
“The general upward revision of DC rates is in-line with the other pre-emptive measures put in place to cool the property market and tame bullish bids by developers,” Suan commented. “Moving forward, such steep increases in DC rates are less likely to be seen as the en bloc market is already cooling off and developers' thirst for land is moderating after the property measures.”
For commercial properties under Group A, DC rates increased 8.3% on average with 116 out of the 118 sectors hiking their rates from 3% to 17%. The largest increase will be applied to sector 110 which is the area of Commonwealth Avenue
The largest increase of 17% to $10,150 will apply to sector 110 where Commonwealth Avenue West, North Buona Vista Road, Holland Road, Ulu Pandan Road, and Clementi Road Area are found.
“We believe the GLS tender for the mixed-use site in Holland Village awarded to Far East-led consortium for $1.2b or $1,888 psf ppr likely triggered this round of revision in DC rate in Sector 110,” Colliers International head of research for Singapore Tricia Song said.
Meanwhile, hotels and hospitals will have a DC rate hike of 11.8% on average with 116 sectors increasing their DC races from 8% to 23%. The highest hike will be implemented in sectors 3 and 5 comprising of Stamford Road, Bras Basah Road, North Bridge Road, Beach Road, Nicoll Highway, Temasek Boulevard, Temasek Avenue, Raffles Avenue, and Raffles Boulevard Boulevard where hotel and hospital DC rates will increase to $12,950.
“The hike could be due to the rise in interest in hotel assets of late,” Song commented. “Of note, 41-room boutique Wangz Hotel at Outram Road transacted in August for $46m and 29-unit Wanderlust Hotel at Dickson Road was sold for $37m in July.”
Sector 6 or Collyer Quay, as well as Sector 11, where Shenton Way, Raffles Quay, and Marina Bay Financial Centre are located, will also have DC rates increased to $12,950.
For industrial properties or group D, DC rates have risen by 2.1% on average for the September to February 2019 period as 26 out of the 118 sectors have spiked their rates ranging from 6% to 11%.
Sector 101 that has Paya Lebar Road, Ubi Area, Macpherson Road, Eunos Link, Aljunied Road, Sims Avenue, Jalan Eunos Area will have the highest DC rate increase to $2,135.
Sector 102 that has Macpherson Road, Aljunied Road, Geylang Road, Guillemard Road, Mountbatten Road, Sims Way, KPE, Jalan Kolam Ayer, together with Sector 103 with its area comprising of Thomson Road, Marymount Road, Braddell Road, Bartley Road, Upper Paya Lebar Road, Lorong Ah Soo, Hougang Avenue 3, Kim Chuan Road, Airport Road, Macpherson Road , Jalan Toa Payoh, and PIE will also have a DC hike to $2,135.
Song said that the DC rate hikes for industrial properties could be an indication of “patchy recovery and the gradual stabilisation in the industrial property market as supply risk tapered”.
“If there is any disagreement over the DC payable for any development proposal calculated based on the rates under the respective Use Groups, developers and owners can opt for a case-by-case valuation by the Chief Valuer, as provided for in the Planning Act,” the ministry said in its statement.
Do you know more about this story? Contact us anonymously through this link.