Originally Posted by
ecimbew
Excerpt from the Straits Times, 1 Sep 2011
Higher property prices hae prompted the government to raise development charges.
The new charges, which take effect today, were far higher than the market had expected but reflect the surging values across residential and commercial real estate sectors over the past six months.
Development charges are applied when the value of a site is increased because of re-zoning, or when a taller building can be erected following a change in the plot ratio.
The average fee for landed hones rose 17 per cent, while that for non-landed residences gained 12 per cent - slightly higher an the 10.6 per cent jump during the last review in March. This is despite some recent tenders showing signs of cooling demand. The increased charges deter collective sales as developers will now have to fork out more to redevelop some of these sites.
Dr Chua Yang Liang, head of research at Jones LaSalle South-east Asia, said the increases were higher than expected and "although there is sufficient empirical evidence to support the increase, the inflationary pressure that is building up in certain sectors of the property market could be another reason."
He added: "The outflow of funds from the United States into Asia and localised policy shifts that drove investors into other non-residential sectors are probably reasons to warrant higher charges."
Side bar
Landed residential
Biggest rise is in 22 sectors including Kallang, Boon Keng, Bendemeer, Alexandra, Ganges, Tiong Bahru, Bukit Batok, Yishun and Sembawang areas
Non-landed residential
Biggest rise is Serangoon Road, Whampoa, Bendemeer Road areas