SINGAPORE: The Housing and Development Board (HDB) on Tuesday (Nov 11) reported a net deficit of S$6.34 billion (US$4.86 billion) for the 2024 financial year.
The annual net deficit before government grants for FY2024 represents a fall from a record S$6.78 billion the previous year.
“HDB incurs a significant deficit every year, as the amount collected from the sale of flats is lower than the total development cost of Build-to-Order (BTO) flats and housing grants disbursed,” the board said in a media release.
Of the FY2024 deficit, S$5.51 billion was incurred for the home ownership segment, with another S$532 million spent on upgrading programmes.
The home ownership segment covers the development and sale of flats and the disbursement of housing grants to eligible households of new and resale flats.
The deficit for the home ownership segment was mainly from gross loss on the sale of flats, expected losses on flats currently under development and the disbursement of Central Provident Fund (CPF) housing grants.
HDB incurred a higher gross loss of S$1.77 billion for the 14,900 flat sales completed – keys issued to buyers – in FY2024, compared with S$1.37 billion in FY2023.
The board also recorded S$2.69 billion in the provision for “foreseeable loss” for flats under development in FY2024. HDB started development of about 23,600 flats in FY2024.
"When HDB begins development of new housing projects, provision is made for the estimated loss of these projects as HDB flats are sold at subsidised prices below their development cost," it said.
"This provision is updated during the construction phase of the project, due to cost changes."
With the completion of sales when keys are issued to flat buyers, the provision for foreseeable loss will then be released, and the actual loss from sales will be reflected.
In FY2024, the Housing Board disbursed fewer grants to eligible buyers of resale flats and executive condominiums.
About S$881 million was handed out in FY2024, compared with the S$999 million disbursed the previous year.
“Separately, HDB continued to upgrade and spruce up rental flats for lower-income Singaporeans and those in need of housing support in FY2024,” the board said.
HDB spent about S$159 million for the provision of rental flats to eligible tenants under various rental housing schemes – a slight dip from the S$160 million it spent in FY2023.
To ensure that HDB towns “keep pace with the evolving needs of residents”, the board said it regularly revitalises estates and flats through programmes heavily subsidised or fully funded by the government.
In FY2024, HDB spent S$532 million on upgrading programmes such as the Home Improvement Programme (HIP), Neighbourhood Renewal Programme, and Lift Upgrading Programme.
This represents a 34 per cent increase from the S$396 million spent in FY2023.
“The increase was due to more HIP projects reaching peak construction phase in FY2024, when spending is typically highest,” HDB said.
Expenditure on residential ancillary functions in FY2024 also rose by 28 per cent to S$570 million, from S$446 million in FY2023.
The residential ancillary functions include lease administration, provision and management of facilities such as car parks in housing estates, as well as planning and building administration.
HDB said the increase in spending was mainly due to higher expenditure on the Electrical Load Upgrading Programme as more HDB blocks were upgraded to accommodate residents’ growing electricity needs.
“HDB remains committed to keeping public housing affordable and accessible,” the board said.
It pointed to significant market discounts for new flats and various housing grants to first-time buyers of new and resale flats.
“As a result, nine in 10 first-timer families who collected keys to their BTO flats in 2024 have been able to service their HDB housing loans using their CPF with little or no cash outlay,” HDB said.
To meet housing demand, HDB will launch about 55,000 new flats from 2025 to 2027. Of these, 4,000 flats with shorter waiting times will be offered per year in 2026 and 2027.
“This is part of our continued efforts to reduce waiting times and expand housing options for home buyers with more pressing housing needs,” it said.
HDB CEO Tan Meng Dui said: "Our substantial deficit in FY2024 reflects our unwavering commitment to providing affordable and quality homes for Singaporeans."
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The annual net deficit before government grants for FY2024 represents a fall from a record S$6.78 billion the previous year.
“HDB incurs a significant deficit every year, as the amount collected from the sale of flats is lower than the total development cost of Build-to-Order (BTO) flats and housing grants disbursed,” the board said in a media release.
Of the FY2024 deficit, S$5.51 billion was incurred for the home ownership segment, with another S$532 million spent on upgrading programmes.
The home ownership segment covers the development and sale of flats and the disbursement of housing grants to eligible households of new and resale flats.
HOME OWNERSHIP
The deficit for the home ownership segment was mainly from gross loss on the sale of flats, expected losses on flats currently under development and the disbursement of Central Provident Fund (CPF) housing grants.
HDB incurred a higher gross loss of S$1.77 billion for the 14,900 flat sales completed – keys issued to buyers – in FY2024, compared with S$1.37 billion in FY2023.
The board also recorded S$2.69 billion in the provision for “foreseeable loss” for flats under development in FY2024. HDB started development of about 23,600 flats in FY2024.
"When HDB begins development of new housing projects, provision is made for the estimated loss of these projects as HDB flats are sold at subsidised prices below their development cost," it said.
"This provision is updated during the construction phase of the project, due to cost changes."
With the completion of sales when keys are issued to flat buyers, the provision for foreseeable loss will then be released, and the actual loss from sales will be reflected.
In FY2024, the Housing Board disbursed fewer grants to eligible buyers of resale flats and executive condominiums.
About S$881 million was handed out in FY2024, compared with the S$999 million disbursed the previous year.
“Separately, HDB continued to upgrade and spruce up rental flats for lower-income Singaporeans and those in need of housing support in FY2024,” the board said.
HDB spent about S$159 million for the provision of rental flats to eligible tenants under various rental housing schemes – a slight dip from the S$160 million it spent in FY2023.
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UPGRADING WORKS
To ensure that HDB towns “keep pace with the evolving needs of residents”, the board said it regularly revitalises estates and flats through programmes heavily subsidised or fully funded by the government.
In FY2024, HDB spent S$532 million on upgrading programmes such as the Home Improvement Programme (HIP), Neighbourhood Renewal Programme, and Lift Upgrading Programme.
This represents a 34 per cent increase from the S$396 million spent in FY2023.
“The increase was due to more HIP projects reaching peak construction phase in FY2024, when spending is typically highest,” HDB said.
Expenditure on residential ancillary functions in FY2024 also rose by 28 per cent to S$570 million, from S$446 million in FY2023.
The residential ancillary functions include lease administration, provision and management of facilities such as car parks in housing estates, as well as planning and building administration.
HDB said the increase in spending was mainly due to higher expenditure on the Electrical Load Upgrading Programme as more HDB blocks were upgraded to accommodate residents’ growing electricity needs.
“HDB remains committed to keeping public housing affordable and accessible,” the board said.
It pointed to significant market discounts for new flats and various housing grants to first-time buyers of new and resale flats.
“As a result, nine in 10 first-timer families who collected keys to their BTO flats in 2024 have been able to service their HDB housing loans using their CPF with little or no cash outlay,” HDB said.
To meet housing demand, HDB will launch about 55,000 new flats from 2025 to 2027. Of these, 4,000 flats with shorter waiting times will be offered per year in 2026 and 2027.
“This is part of our continued efforts to reduce waiting times and expand housing options for home buyers with more pressing housing needs,” it said.
HDB CEO Tan Meng Dui said: "Our substantial deficit in FY2024 reflects our unwavering commitment to providing affordable and quality homes for Singaporeans."
Continue reading...