THE Housing and Development Board (HDB) posted a higher net deficit of S$6.8 billion for the financial year 2023, breaking last year’s record S$5.4 billion net deficit.
HDB incurs a significant deficit each year as its total cost for developing Build-to-Order (BTO) flats and dispensing housing grants outweighs what it collects from flat sales, the board said in a Thursday (Nov 7) press statement.
Some S$6.2 billion of FY2023’s net deficit was spent on HDB’s Home Ownership segment. This covers the development and sale of flats to eligible buyers under public housing home ownership schemes as well as the disbursement of housing grants for new and resale flats to eligible households.
“The substantial deficit incurred under the Home Ownership segment, which constitutes the bulk of our overall deficit, underscores our commitment to keep public housing affordable, accessible and inclusive for Singaporeans, even in the face of rising costs,” said HDB chief executive Tan Meng Dui, who added that the board’s key priority is to enable Singaporeans to own homes.
The Home Ownership segment’s S$6.2 billion deficit largely stemmed from expected deficits for flats currently under development, gross deficit for flat sales, and the disbursement of Central Provident Fund (CPF) housing grants – all of which rose on the year.
Expected deficits for flats currently under development took up the bulk of the S$6.2 billion, rising to S$3.7 for FY2023 from S$2.7 billion in FY2022.
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This was due to a ramp-up in BTO flat supply in FY2023, as the HDB began development works for 22,700 new flats – a 50 per cent increase from FY2022 where 15,100 flats commenced development.
Gross deficit from flat sales climbed on the year to S$1.4 billion in FY2023 from S$1.2 billion previously.
This came about although the number of units sold (excluding studio apartments and flats sold on short leases) fell to 16,844 in FY2023 from 18,478 units sold in FY2022, on higher construction costs.
HDB also disbursed more CPF grants to eligible buyers of resale flats and executive condominiums, with its total sum of disbursed grants for FY2023 rising by around 46 per cent to S$999 million from S$686 million in FY2022.
The board spent S$160 million on rental housing schemes that provide eligible tenants with rental flats, an increase from S$140 million in FY2022. It also stepped up works to upgrade, repair and spruce up rental flats.
An additional S$396 million was channelled into upgrading initiatives in FY2023, such as the Neighbourhood Renewal Programme, Home Improvement Programme, and Lift Upgrading Programme.
Another S$446 million was spent on residential ancillary functions. These included lease administration, provision and management of facilities such as housing estate car parks, and planning and building administration.
As part of efforts to meet rising housing demand, HDB ramped up the supply of BTO flats in recent years and remains on track to offer a total of 100,000 flats from 2021 to 2025.
“With the significant market discounts provided for new flats and various housing grants, eight in 10 first-timer families have been able to service their housing loans using CPF, with little or no cash payment,” said the board.
It added that it will continue to review its housing policies and make adjustments where necessary to support Singaporeans’ housing needs.
HDB posted widening net deficits for the past two financial years, with deficits of S$5.4 billion in FY2022 and S$4.4 billion in FY2021 breaking prior records.
