Chart of the Day: Development charges in September highest since 2007

En bloc sales are boosting development costs.

This chart from Colliers International shows development charges (DC) in September have grown by 13.8% compared to March 2017, the highest increase since September 2007, when the average increase was 57.8%.

The largest increase of 29% applies to sector 100, or Tampines Road/Hougang/Punggol/Sengkang area, which rose from $3,360 psm to $4,340 psm.

This happened after the en bloc of sale of Rio Casa for $706 psf.

DCs for sector 101 also rose by 28% after the collective sale of Eunosville for $909 psf ppr.

Other sectors that have seen land sales year-to-date had DC rates surge by 20-25%.

"With higher asking prices and higher DC rates, developers will compete up to a certain point until the pricing economics become unsupportable," Colliers said.

DC rate are revised twice a year on March 1 and September 1 by the Ministry of National Development, in consultation with the Chief Valuer. The rates are based on the assessment of land values and land sales and other transactions.

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