The Ministry of National Development (MND) has announced revisions on the development charges (DC) rates for the period covering 1 March to 31 August this year.
Under the revisions, the DC rates for Group A (Commercial) was boosted by an average of six percent, with the biggest increase of 52 percent in Sector 106 (Sengkang / Seletar Area).
“The largest increase of 52 percent in commercial rates in the Seletar area despite a lack of recent transactions suggests that the Chief Valuer could be ‘playing’ catch up with the market value in the area,” said Chua Yang Liang, Head of Research and Consultancy at Jones Lang LaSalle.
Meanwhile, DC rates for Group B1 or Residential (landed) remained unchanged while the rates for Group B2 or Residential (non-landed) increased by three percent on average.
“The most significant decreases in DC rates are in Sector 100 (Punggol Town / Upper Serangoon Road area) and Sectors 103 & 104 (Hougang / Upper Paya Lebar Road / Toa Payoh / Bishan area), all by 14 percent,” said the Urban Redevelopment Authority (URA).
According to Chia Siew Chuin, Director of Research & Advisory at Colliers International, “The drop in DC rates by an average of three percent for non-landed residential use is within market expectations.”
An average increase of 15 percent in DC rates was seen for Group C (Hotel and Hospital). The largest increase was 29 percent, accounting for Sectors 79 to 85 and 87 (Alexandra / Redhill / Tiong Bharu / Bukit Merah / Telok Blangah Road area), Sector 99 (Pasir Ris / Loyang / Upper Changi Road area) and Sector 110 (Holland / Ulu Pandan area).
DC rates for the remaining five Use Groups have not changed, the URA added.
The decision to maintain DC rates is “a welcomed move” as this will support weaker sentiments in the industrial property market, noted Chia.
Moreover, there were no revisions in the number of geographical sectors and their boundaries, although the Use Groups Table was modified to incorporate community sports and fitness building in Group E (Place of Worship / Civic & Community Institution).
“The extraction of community based sports and recreation uses from Group A into Group E (which is generally of lower implied land value) should encourage more of such development in the future,” said Chua.
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