MND revises DC rates for new projects

The Ministry of National Development (MND) has revised the development charge (DC) rates for new building projects in Singapore, effective from today to 29 February 2012.

Under the latest revisions, the average DC rates for commercial developments increased by 22 percent, with the biggest rise of 32 percent in the Paya Lebar / Eunos / Macpherson Road area.

The new DC rates for non-landed residential projects climbed by an average of 12 percent, while those for landed residential projects rose by an average of 17 percent.

For the hotel / hospital category, the new DC rates have gone up by an average of seven percent.

In addition, the DC rates for industrial and warehousing use rose by an average of 31 percent, with the biggest increase of 55 percent in the Tuas / Pioneer Road / Jurong / Sungei Kadut / Mandai Estate / Woodlands area, as well as in the Woodlands / Sembawang / Yishun area.

“This latest round of DC revision has been higher than market expectations,” said Dr Chua Yang Liang, National Director and Head of Research at Jones Lang LaSalle - Southeast Asia.

“Although there is sufficient empirical evidence to support the increase, the inflationary pressure that is building up in certain sectors of the property market could be another reason.”

“The outflow of funds from the US into Asia and localised policy shifts that drove investors into other non-residential sectors, are probably enough reasons to warrant the Chief Valuer to pursue a more aggressive / tighter policy stance on DC revision, as a tool to contain the pressure,” Dr Chua added.

Meanwhile, the revised rates will apply to cases that are granted Provisional Permission (PP) or second and subsequent extensions to the PP from the effective date.

To contact the journalist, you may send your message to editor@propertyguru.com.sg