The increase in non-landed DC rates is the steepest since Mar 2018 while the increase in landed DC rates is the largest since Sep 2013.
Since 1Q 2021, land parcels for non-landed development/EC sold under the GLS programme and in the collective sale market have seen price increases. Developers have bid up land prices to replenish their landbank. Maxwell House, Ang Mo Kio Ave 1, Lentor Central, Tengah Garden Walk and Tampines St 62 have been sold in the past six months at higher prices.
The GCB market has also seen active buying in the past six months. A GCB in the Nassim area was sold for a record $4,005 psf hence DC rates are adjusted upwards by 18%.
The increase in DC rates will affect the collective sale market as it will cost the developer more to intensify land use. For example, International Plaza which is in Sector 9 saw an increase of 9.4% in non-landed DC rates. The pace of increase in land prices may slow however the urgent need to replenish land bank may outweigh the increase in DC rates.