Development charge rates slashed on back of steady property price declines

DC rates will be cut by 3.2%.

The Urban Redevelopment Authority (URA) revealed Friday that development charge rates for local property will be revised by an average of 3.2% from the 1st March.

The cuts are on back of weak bids for recent land tenders and the steady property price declines.

For instance, DC rates for non-landed residential sites in the Punggol/Sengkang (Sector 100) registered the most significant fall of 12.5% in this current review period.

“It does seem that Sim Lian Land’s top bid of S$157.8 million or about S$280 per sq ft per plot for the Anchorvale Crescent EC site in February 2015 might have played a part in the decline, as this bid represented among the lowest price on a per sq ft per plot ratio basis ever awarded for an EC site on the GLS programme since July 2011,” said Chia Siew Chuin, Director of Research & Advisory at Colliers..

Nicholas Teo of CMC Markets noted that this is the second consecutive time this number has been reduced, following the first cut in the previous semi-annual release in September of 2014.

“Whilst the DC and this 3.2% saving represent only a marginal impact on developers’ margins, this further confirms just how tough it has been for residential property developers in Singapore,” he said.