For landed residential use, the DC rates have increased by 6.3% on average, while the DC rates for commercial use have been slashed by the Government for the third consecutive time, by 0.7% on average. Photo: 2 Cluny Hill Bungalow
The Government has raised the development charge (DC) rates for landed and non-landed residential use groups for the half-year period starting 1 September, amid the private housing market’s healthy performance.
For landed residential use, the DC rates have increased by 6.3% on average, or the “highest increase since September 2013, when DC rates were raised by 6.8%”, said Tricia Song, Head of Research for Southeast Asia at CBRE.
Of the 118 sectors, 116 saw the DC rates increase by 4% to 18%, while rates for the remaining two sectors were unchanged.
The largest hike of 18.3% came from Sector 67 (Cluny Road/ Napier Road/ Tanglin Road/ Anderson Road/ Stevens Road/ Dalvey Road).
“This increase might be on the back of the landmark GCB deal at 2 Cluny Hill,” said Song.
In April, a 14,845 sq ft GCB at 2 Cluny Hill was sold for $63.70 million, which works out to a record price of $4,291 per sq ft (psf). “The buyer is said to be a Singaporean entrepreneur from the tech sector in his early 30s,” added Song.
DC rates for non-landed residential use was also raised by an average of 10.9%, the highest upward revision since March 2018, when DC rates for such use were raised by 22.8%. Out of the 118 sectors, 116 registered a hike of between 2% and 19%.
The largest hike applies to Sector 16 (Cantonment Road/ Eu Tong Sen Street/ Cross Street/ Chinatown Area/ Duxton Area/ Peck Seah Street/ Kee Seng Street) and Sector 107 (Lentor Avenue/ Springleaf Area/ Upper Thomson Road/ Upper Peirce Reservoir/ Pan-Island Expressway/ Lornie Road/ Marymount Road/ Ang Mo Kio Avenue 6).
Wong Xian Yang, Head of Research, Singapore at Cushman & Wakefield attributed the significant increases in these sectors to the sale of Government Land Sale (GLS) sites and sites from the collective sales market.
“In DC Sector 107, the private housing site at Ang Mo Kio Avenue 1 has drawn the highest bid of $381.4 million or nearly $1,118 psf ppr in a state tender that closed in May 2021. In July 2021, the Lentor Central site attracted a top bid of $784.1 million or $1,204 psf ppr,” he said.
Meanwhile, the DC rates for commercial use have been slashed by the Government for the third consecutive time.
However, the rate of decline was slower at an average of 0.7%, compared to the 1.5% reduction seen during the previous revision.
“While this reflects still challenging operating conditions in the broad retail and office markets, a recovery could be on the cards as seen by the declining rate of decrease,” said Wong.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: email@example.com