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What Did Singaporeans’ Say When HDB Incurs $2.02b Deficit?

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By on HDB, Khaw Boon Wan

What Singaporeans’ Say?

Mei Wong HDB’s primary goal is to provide public housing for most Singaporeans and to keep prices reasonably affordable by giving of many grants.

I think they have achieved that well in the past few years so we have to understand why there is a deficit. At least it is not because the accounts are not in order and auditors identify gaps where money is missing.
David Tan Guang Xiang Can’t you see the bright side of the article? Why there’s so much deficit is also due to the lower rental received. Isn’t this good news to those who rent from Hdb. Be it commercial or residential rental?
Caroline Lim Some comments makes me mad. Why don’t you ask your foreign friends living in cities? How much they pay for their house & is their government helping? We are consider fortunate & rmb that Singapore has very limited land. If we lower the HDB costs even more, where does the $ comes from? Obviously, from your pocket in other forms.
Jen Ong HDB is indeed public housing. Flats were initially offered to the citizens at extremely low price, with the objective that the people had a place to call home. Each citizen is given the chance to purchase new flat direct from HDB twice, with the objective that families could upgrade to bigger flats when their financial status improved or family size gets bigger, or for those who choose to downgrade. However, by early 1990s onwards, more and more people started to treat our public housing as a sure-earn investment, where there appeared a surge of first-time owners selling their flats at high price (and willing buyers) not long after the 5-year minimum occupancy period for profit, but not because they wanted or needed to upgrade or downgrade. Selling price was getting out of control. HDB did try to stabilize the pricing by introducing valuation system for resale flats (guess around 2000s) and new flat pricing being pegged at subsidized rate to market rate. Although it did slow down the pricing upsurge, but…. Anyway, this behaviour remains true till today, though it does improve after latest amendment to the valuation process. Hope it stays or gets better.

If we are like any other countries, whereby we are only entitled to one-time purchase of new flats, or we did not abused our public housing, the pricing would not have become a severe issue. Land is scarce, just to supply flats for first-timers (approximately 12,000 per year) is already a challenge. Unlike private properties ( they are not sure-profit; sometimes the market rate is way below buying price), the market rate of the new flat upon signing mortgage paper is already around 100K above the buying price. It could be more by the time we could sell the flats.
Kelvin Lam $2b deficit means singaporeans who bought hdb paid $2b less cos absorbed by the state

Pay less n still so many kpkb, pay more n also kpkb
Timothy Lim Because of more subsidies. I like this kind of deficits.
Kwek Derek This is peanuts deficit considering sg mountains of reserves..
Dani Herwie Want housing subsidies but expects HDB to be in the green?

Gosh. The level of critical thinking in this country..

News Report from ST:

HDB incurs $2.02b deficit in last FY

HDB incurs $2.02b deficit in last FY

Members of the public viewing models of projects on sale at HDB Hub on Aug 24, 2015.PHOTO: KEVIN LIM

Higher loss due in part to lower surplus in rental and related businesses segment

Janice Heng

The Housing Board incurred a deficit of more than $2 billion in the last financial year, up from $1.97 billion the year before.

This was even as the deficit for its home ownership programme – which accounts for most of the Housing Board’s losses – shrank, compared with last year’s record figure. However, its surplus in other areas also shrank.

In particular, the surplus for the Housing Board’s rental and related businesses segment fell to $679 million, down from $745 million the year before.

So, in the year ended March 31, the Housing Board’s overall deficit before government grants was $2.02 billion, according to the audited financial results on its website. Apart from being more than in financial year 2014, the deficit was much higher than the $797 million and $443 million in deficit in the two preceding years.

Regardless of the deficit, the Housing Board receives a grant from the Ministry of Finance every year to balance its accounts.

In Parliament in January, National Development Minister Khaw Boon Wan had said that the Housing Board’s deficit would “continue to be high” in the next few financial years. This is because flats launched in the three years of ramped-up supply – from 2011 to 2013 – are still being completed and handed over.

For the whole of this year, 26,000 public housing units are expected to be completed. The next two years will see another 25,000 units completed each year.

New flats come under the Housing Board’s home ownership programme, the largest contributor to its deficit. In the latest financial year, the home ownership deficit was $1.75 billion, down from the record $1.93 billion deficit the year before. The Housing Board makes a loss on home sales because its accounts include a provision for “foreseeable loss”. This is the difference between the selling price of flats and the estimated cost of their development.

In the home ownership segment, the Housing Board made a smaller loss on home sales and received more external income in the last financial year. This more than made up for an increase in the Additional and Special Central Provident Fund (CPF) Housing Grants given out. Homebuyers received $263 million in such grants, up from $162 million the year before.

The amount disbursed in grants could rise at the coming years. As announced in this year’s National Day Rally, the Special CPF Housing Grant’s eligibility will be widened and the maximum amount raised from the next Build-to-Order launch onwards.

Source:  https://www.facebook.com/TheStraitsTimes/posts/10153031366282115  http://www.straitstimes.com/singapore/hdb-incurs-202b-deficit-in-last-fy#xtor=CS1-10

 

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