_Revision in Development Charge
Even though 2021 was a year of economic recovery with GDP growth at 7.6%, the performance in the various real estate sectors were mixed. In the residential sector, landed homes were highly sought after in 2021 and remains so in early 2022. The Property Price Index (PPI) for landed homes expanded by 13.3% in all of 2021 and transaction value was at an all-time yearly high (since the data became available) of around S$9 billion. The stock of landed houses has remained relatively stable and generally unchanged for more than 25 years – accounting for just 19.2% of the whole private residential market today based on URA’s Q4 2021 data – a rare residential asset class in high-rise Singapore. These homes are considered a secure source of investment, though many buyers of landed homes purchase the property for their own use. As such, the Development Charge (DC) rate for Use Group B1 (Landed Residential) rose by an overall 4.8% with every single geographical sector registering an increase. Some of the highest increases were in Good Class Bungalow areas such as Sector 67 (Orange Grove Rd, Nassim Rd, Napier Rd) with a rise of 10% from the previous rate revision, as well as areas where landed homes are proliferate - Sectors 47 (Killiney Rd, Oxley Rd, River Valley), 63 (Chancery Lane, Dunearn Rd, Whitley Rd), 64 (Lornie Rd, Thomson Rd) and 91 (Mountbatten Rd, Tg Katong Rd).
As for Use Group B2 (Residential, non-landed) with 6 out of 118 geographical sectors chalking an overall increase of a marginal 0.3%. Since the announcement of the cooling measures on 15 December 2021, developers have been more restraint at government land sales (GLS) tenders and also have paused to reevaluate collective sales sites on offer. The sector with the highest increase was Sector 92 (Guillemard Rd, Dunman Rd) at 15.4% from the previous revision in September 2021. This was most probably due to the sale of the consolidated private freehold development sites at Thiam Siew Avenue (which was reported to have sold at $1,488 psf per plot ratio (ppr) in November 2021) and the GLS tender at Jalan Tembusu which was awarded for $768 million or $1,302 psf per plot ratio (ppr). At Sector 50 (Fort Rd, Nicholl Highway, Tanjong Rhu), the collective sale of La Ville at S$152 million or S$1,540 psf ppr could have contributed to the increase of 7.7%.
However, Use Group A (Commercial) did not see much change with 29 sectors increasing while 89 remained unchanged, with an overall slight average increase of 0.7%. Most of the increases were in the Downtown Core Planning Area. There have been some strata commercial and shophouse sales, as well as a few building sales such as 61 Robinson Road at S$422 million in September 2021, Central Square at Havelock Road for S$315 million in December 2021, and Cross Street Exchange for S$811 million in January 2022, that could have influenced the 2.6% to 3.2% gains in the various sectors in the CBD.
The hotel/hospitality sector continues to suffer from a lack of tourist arrivals and compromised occupancy rates despite staycations and quarantine accommodation. The overall decrease of 0.7% for the DC rates in Use Group C (Hotel/Hospital) where 25 sectors recorded declines and 93 others remaining unchanged, was primarily led by the 10.4% fall in Sector 11 (Shenton Way/ Straits Boulevard/ Marina Boulevard/ Raffles Quay). This was probably due to the Marina View site being awarded at S$1.5 billion or S$1,379 psf ppr in September 2021 to the one sole bidder who had triggered the site.