Oral Answer by Ministry of National Development on the financial position of the Central Weave BTO project at Ang Mo Kio

Oct 4, 2022

Mr Leong Mun Wai: To ask the Minister for National Development
(a) what is HDB’s net loss for the Central Weave BTO project at Ang Mo Kio;
(b) what is the cost of land paid by HDB to SLA for this project; and
(c) what is the net profit and loss position for the Government, including HDB and SLA, for this project.

Answer:

HDB will incur an estimated development loss of about $250M for the Build-to-Order (BTO) project Central Weave @ AMK. If we consider the CPF housing grants that HDB will extend to eligible buyers, the loss will increase further by an estimated $20M, to about $270M.

2        The estimated land cost for the project is about $500M. This is determined independently by the Chief Valuer, using market valuation principles. Land forms part of the Past Reserves, hence when HDB uses the land for development, the money that HDB will need to pay for the land must be paid back into the Past Reserves, which are invested and grown for future generations. The Government cannot use proceeds from land sales as revenue for spending in the Budget.

3        HDB does not price new flats based on cost. When pricing new flats, HDB first establishes their market value by considering the prices of comparable resale flats nearby as well as the individual attributes of the flats and prevailing market conditions. To derive the selling prices, HDB applies a significant subsidy to the assessed market values to ensure that new flats are affordable to those buying their first home. On top of this, HDB provides further grants, such as the Enhanced CPF Housing Grant, Proximity Housing Grant and Step-Up CPF Housing Grant, to help specific demographic groups with their home ownership aspirations.

4        HDB incurs a significant deficit every year, as the amount that it collects from the sale of flats is far less than the cost of its building programme and the housing grants it disburses each year. For the Financial Year (FY) 2021/22 for example, HDB recorded a deficit of $3.85 billion for its Homeownership Programme. The average deficit incurred by HDB in the last three years from 2019 to 2021 was about $2.68 billion a year. So claims that HDB profits from the development and sale of HDB flats are false.

5        The Government will continue to ensure that public housing remains affordable and accessible for all Singaporeans.