THE recent sharp rise in development charges around Orchard Road was not surprising, given the increase in the area's property prices, says National Development Minister Mah Bow Tan yesterday.
The charges - levied on a developer who wants to build a bigger condominium on a site, for example - are revised every six months according to property values in an area.
In the most recent update last week, the development charge for non-landed residential use rose by as much as 38 per cent in the Orchard Road area.
Mr Mah said yesterday at the launch of an exhibition in the Botanic Gardens: 'Prices have been moving up fairly sharply in certain areas, and correspondingly, the development charges have also gone up. I don't think it was unexpected.'
He said he was not too concerned about the rise in property prices.
'That is what the market is prepared to pay. If you look at prices in Singapore compared to other major global cities, I think you will find that the prices are not out of whack. We are not unreasonable.' On the topic of how the Government intended to meet the expected increase in demand for hotel rooms, given the target to double tourist arrivals to 17 million by 2015, Mr Mah said it would ramp up the release of hotel sites 'fairly sharply' for the next few years.
He added, however, that it was placing more land on the reserve list to avoid an oversupply of hotel rooms.
Under the reserve list system, a site is not put up for tender unless a developer commits to bidding a sum acceptable to the Government.
Asked if the Government had a target number of additional hotel rooms in mind, Mr Mah said: 'We can't push those rooms onto the market immediately. We will have to phase it in...we will play it by ear as we go along.'
'If you look at prices in Singapore compared to other major global cities... the prices are not out of whack.'
MR MAH, on the latest revision
