The Ministry of National Development (MND) has cut the development charges (DC) for non-landed residential properties for 73 out of 118 geographical sectors at rates ranging from 2.0 to 13 percent, while they were unchanged for landed houses.
“The overall revision comes on the back of continued weakening in the overall (housing) market against the backdrop of the strict credit tightening and anti-speculative measures that effectively reduced both transaction prices and volumes,” revealed JLL.
On average, DC rates for the non-landed residential sector declined further by 3.2 percent after recording an average drop of 1.6 percent in the previous review period between September 2014 to February 2015.
Colliers International noted that the government slashed DC rates for non-landed residential properties mainly in the Core Central Region (CCR), as well as the Punggol/Sengkang and Yishun/Woodlands areas.
The largest drop of 13 percent was seen in Tampines Road, Hougang, Punggol and Sengkang.
The consultancy explained that DC rates for the sector may have been affected by the $157.8 million ($280 psf ppr) winning bid for the Anchorvale Crescent EC site in February 2015, which represents the lowest price on a psf ppr basis ever awarded for an EC site since July 2011.
Similarly, the $103.8 million ($278 psf ppr) winning bid for the EC site at Woodlands Avenue 12, which is even lower than the land price for the Anchorvale Crescent site on a psf ppr basis, may have partly been the reason for the 5.1 percent drop in the sector’s DC rate for non-landed residential properties.
The new DC rates are effective from 1 March to 31 August 2015.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email email@example.com