Property consultants expect development charge (DC) rates to move up starting September due to higher land prices in previous months, according to media reports.
But this is likely to be conservative as the government continues its efforts to ensure market stability.
Average DC rates for commercial use are likely to rise between three and 10 percent, while rates for landed residential use could climb up to five percent.
Meanwhile, analysts have varying expectations for non-landed residential use.
According to Colliers International, DC rates in this use group will range from zero to three percent, while Jones Lang LaSalle and CBRE expect three to five percent and 10 to 20 percent respectively.
For industrial use, CBRE forecasts growth of 10 to 15 percent, Jones Lang LaSalle predicts below one percent, while Colliers International pegs the hike at between zero to three percent. As for hotels, Jones Lang LaSalle expects an increase of less than five percent, while Colliers anticipates three to eight percent.
The DC rate is an amount paid to the state by a developer in exchange for the right to enhance the use of certain sites or build bigger projects. They are also seen as the government’s reading of land and property values. The rates are revised every six months and stated according to use groups across 118 geographical sectors by the Ministry of National Development (MND) in consultation with the Chief Valuer (CV).
Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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