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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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