Increase development rate increases can be hot-up land features



The Ministry of National Development on 31 August revised the development levies for the period from 1 September 2018 to 28 February 2019. The assessment is carried out every six months in consultation with the Chief Trustee.

The tariffs for development costs (DC) for four user groups, namely Groups A (Commercial), B2 (Residential, (non-country)), C (Hotel / Hospital) and D (Industry) have increased. The DC rates remain unchanged for user groups B1 {Residential, (landed)}, E (Place of Worship / Civic and Community Institution) and 3 other use categories F, G and H (open space, nature reserve, agriculture, drainage, road, railway , cemetery, mass Rapid transit route, Light Rail transit route).

The development costs for Use Group A (Commercial) increased on average by 8.3%.

116 out of 118 sectors have risen DC rates, ranging from 3% to 17%. There is no change in the DC rates for the remaining 2 sectors. The largest increase of 17% applies to sector 110 (Commonwealth Avenue West / North Buona Vista Road / Holland Road / Ulu Pandan Road / Clementi Road Area)

development costs
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The development costs for Use Group B2 {Residential, (non-landed)} increased by an average of 9.8%. 75 of the 118 sectors have a rise in DC rates ranging from 3% to 33%. There is no change in the DC rates for the other 43 sectors. The largest increase of 33% applies to the following sectors:

• Sector 43 (Tanglin Road / Cuscaden Road / Orchard Blvd / Grange Road)

• Sector 67 (Dalvey Road / Stevens Road / Anderson Road / Orange Grove Road / Tanglin Road / Napier Road / Cluny Road)

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The DC rates for Use Group C (Hotel / Hospital) increased by 11.8% on average. 116 out of 118 sectors have risen DC rates, ranging from 8% to 23%. The rates are unchanged for the remaining 2 sectors. The largest increase of 23% applies to the following sectors:

• Sectors 3 & 5 (Stamford Road / Bras Basah Road / North Bridge Road / Beach Road / Nicoll Highway / Temasek Boulevard / Temasek Avenue / Raffles Avenue / Raffles Boulevard)

• Sector 6 (Collyer Quay)

• Sector 11 (Shenton Way / Raffles Quay / Marina Bay Financial Center)

The DC rates for Use Group D (Industry) increased by 2.1% on average. 26 of the 118 sectors have a rise in DC rates from 6% to 11%. The rates are unchanged for the other 92 sectors. The largest increase of 11% applies to the following sectors:

• Sector 101 (Paya Lebar Road / Ubi Area / Macpherson Road / Eunos Link / Aljunied Road / Sims Avenue / Jalan Eunos Area)

• Sector 102 (Macpherson Road / Aljunied Road / Geylang Road / Guillemard Road / Mountbatten Road / Sims Way / KPE / Jalan Kolam Ayer)

Sector 103 (Thomson Road / Marymount Road / Braddell Road / Upper Paya Lebar Road / Lorong Ah Soo / Hougang Avenue 3 / Kim Chuan Road / Airport Road / Macpherson Road / Jalan Toa Payoh / PIE)

The revised development costs apply from 1 September 2018. The new rates apply to cases for which provisional approval (PP) or 2nd and subsequent extensions of the PP on or after the effective date are granted. If there is disagreement over the DC payable for each development proposal calculated on the basis of the rates under the respective Use Groups, developers and owners can opt for a case-by-case assessment by the Chief Valuer, as provided for in the Planning Act.

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Real estate market observers said the increase in Sector 43 was due to the collective sale of Park House in June at $ 2,910 per sq ft per plot ratio (psf ppr) and the Cuscaden Road Government Land Sale (GLS) site May was sold for $ 2,377 pkf ppr. This land development was a record for every residential area and for residential government.

Ms. Tricia Song, Colliers International's research leader for Singapore, said that the current figures that followed market developments in the period March-August may not fully reflect current cautious sentiment, noted the latest figures. Others said that since the new measures in July there have not been many land transactions.

JLL senior consultant Karamjit Singh said: "The impact of the measures was not visible in this latest set of DC rates, but the full scope of the measures will be seen in the next round of tariff revisions from 1 March 2019."

Suggesting that this is because developers who purchase homes for development now have to pay 5% non-remtable extra buyer stamp, Mr Singh added: "For non-landed residential use, we can see the DC rates flatten or even fall because land prices may fall as a result of the new measures. "

Observers said the development levies are rising across the commercial, non-land-based residential, hotel / hospital and industrial use country reflecting their attractiveness to investors in the past 2 quarters.

Paul Ho, head of mortgage advisor of icompareloan.com, said, "the development costs of 0% for & # 39; landed & # 39; can mean that landed properties get hot."

He added: "Buyers of landed properties can potentially save dozens (if not hundreds) of thousands of dollars if they hire a mortgage broker for their purchase of the high-end item."

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