Developers who are looking to replenish their land banks will be doing so with caution as the government hikes the development charge rates for residential use.
We are already aware that the two new recent land bids will set a record selling price in the Outside Central Region (OCR) of Singapore when they launch next year. So how will these higher development charge rates affect both existing owners and aspiring owners of private properties?
Existing owners of aging properties especially developments that have strong intentions to en-bloc (ie: Ivory Heights, Spanish Village and Mandarin Gardens etc) may have to revisit their reserve prices in order to enhance the risk-reward ratio for developers.
Those who intend to own a new private property will have to bring forward their purchase to enter at current prices instead of sitting on the fence. Buyers have to take into consideration the following factors as well:
1) Prices tend to increase when supply declines;
2) Developers hold on to some unsold units as there are buyers willing to pay for a ready product (or near completion);
3) The current pandemic situation is causing construction delays across the board and increased labour and material costs.