DC rates seen rising
Development charges, payable to the state in exchange for the right to enhance the use of certain sites or to build bigger projects on them, are expected to head north from Sept 1, based on the increases in land values over most of the past six months.
However, the rate hikes may be smaller than the previous 6-monthly revision. The Ministry of National Development, in consultation with the Chief Valuer, revises DC rates across 118 geographical sectors in S’pore. The revisions, done twice a year, are based on current market values.
Analysts say that the winning bids for two sizeable commercial plots in Paya Lebar and Boon Lay Way at state tenders in April and May will pave the way for higher commercial DC rates, especially in suburban locations. The prices for the two sites reflect premiums of about 139% and 147% respectively over implied land values based on current March 1, 2011 DC rates for commercial use in these regions.
At a state tender earlier this month, a condo plot near Potong Pasir MRT Station drew a top bid that was 6.6% below that for a neighbouring site in June last year. The price for the latest plot reflects a 6% premium to the DC rate-implied land value, which marks a big slowdown from the 141% premium for a Bendemeer plot sold in April.
Source : The Business Times, 29 Aug 2011
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