Friday, March 1, 2013

Govt adopting wait and see approach to property market

Mar 1, 2013 -

Under the latest revisions to the development charge (DC) rates which took effect yesterday, the Ministry of National Development has not made any changes for Group B2 (non-landed residential sector).

Desmond Sim, Associate Director at CBRE Research, said this may be due to “the government’s intention to give more time for the market to respond to the cooling measures that were introduced in January 2013”.

Taking the same view, Chia Siew Chuin, Director of Research & Advisory at Colliers International, said the government is probably “adopting a wait-and-see approach for this use group”.

“Surprisingly, the latest revision of DC rates for non-landed residential use remained flat for all the sectors. This is despite the sales of 16 predominantly residential sites (including the collective sales of Thomson View) inclusive of 10 sites from the government land sales (GLS) programme, which reflected developers’ keen interests in several sites and the unabated rising land tender bids since the last review in September 2012,” explained Chia.

Meanwhile, for the landed residential sector (Group B1), DC rates went up by an average of four percent, with increases ranging from seven percent to 15 percent in 41 sectors with no change in the DC rates for the remaining 77 sectors.

Chia said this is average is close to the consultancy’s projections, noting that this use group “has not increased for a whole year, even though the prices of landed housing have been increasing in a slow and steady fashion”.

Over in the commercial sector (Group A), Chia reckons the 24 percent average increase island-wide may be seen as “beyond expectations given declining rents amid softer market conditions as well as a lack of market activities for the commercial use category in some areas”.

However, the uptick may be attributed to robust sales activity in the commercial strata-titled market which includes shops and offices, said Sim.

“The significant increase in DC rates for Sectors 105 to 107, 114 and 115, is attributed to the prospective development of the North Coast Innovation Corridor which includes the future Seletar Regional Centre and the recently announced plans for the Woodlands Regional Centre,” he added.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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