The commercial property sector has been hit by the largest hikes in development charges (DC) — taxes payable on the enhancement in land value — in the latest half-yearly review, with the increases spread across many parts of Singapore, the Ministry of National Development said yesterday.
Commercial DC rates for March to August this year have been revised upwards by an average of 15 per cent in 89 out of the 118 geographical sectors, with the largest increase of 29 per cent in areas such as Holland Road, Farrer Road, Queensway and Bukit Timah. Rates for the other 29 areas remained unchanged.
Mr Ku Swee Yong, Chief Executive of property agency Century 21, said: “One of the reasons could be that new mixed developments in some of these areas, for example, KAP Residences, sold very well, so that pushed up the rates. But we will see whether this is sustainable when these projects get TOP (Temporary Occupation Permit).”
The hotel and hospital segment is set for an average 13 per cent climb islandwide, with increases in all but two geographical sectors. The largest hike of 31 per cent is in Changi Road, East Coast and Marine Parade, with Ms Chia Siew Chuin, Colliers International’s Director of Research and Advisory, saying this was supported by an East Coast Road site that was sold at 129 per cent above the prevailing imputed land value.
In the residential sector, DC rates for landed homes will be raised in 13 out of the 118 areas, with hikes of between 9 and 10 per cent. In the non-landed segment, DC rates will be raised in 15 out of the 118 sectors, with hikes of between 6 and 10 per cent.
Overall, the revision of DC rates in the non-landed residential sector averaged a mere 1 per cent rise, Ms Chia noted.
“This is not surprising as the URA non-landed residential price index softened by a marginal 0.3 per cent in H2 2013, compared with the 2.2 per cent growth in H1 2013, reflecting a halt to overall price increases on a general islandwide basis and a slowdown in the wider private residential market due to the combined effects of the Government’s cooling measures, especially the Total Debt Servicing Ratio (TDSR),” she said.
Areas hit by the highest 10 per cent for both landed and non-landed residential property include Paya Lebar and Aljunied.
Meanwhile, the industrial and warehousing segment, which experienced the biggest jump in the last review, will have its DC rates unchanged.
Source : Today – 1 Mar 2014