HDB incurred S$6.775 billion deficit in FY2023 as BTO development and housing subsidies drive costs

In a recent press release on Thursday (7 Nov), Singapore’s Housing and Development Board (HDB) disclosed that it incurred a net deficit of S$6.775 billion for the Financial Year (FY) 2023, prior to receiving government grants.

According to HDB, this deficit represents an increase from the S$5.38 billion deficit recorded in FY 2022.

HDB stated that the Home Ownership segment accounted for S$6.225 billion of this deficit, largely due to the costs of developing Build-To-Order (BTO) flats, disbursing housing grants, and supporting subsidies.

HDB’s Chief Executive Officer, Mr. Tan Meng Dui, commented, “Enabling Singaporeans to own their homes remains HDB’s key priority. 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.”

Mr Tan highlighted that HDB had significantly increased BTO flat construction in FY 2023, starting work on approximately 22,700 units, a 50% increase over the 15,100 units in FY 2022.

He further noted that HDB continues to offer BTO flats at considerable market discounts, alongside additional subsidies for Prime Location Public Housing (PLH) flats to ensure broad accessibility.

HDB detailed that the S$6.225 billion Home Ownership segment deficit stemmed primarily from expected deficits related to flats currently under development, losses on flat sales, and the distribution of CPF housing grants.

According to HDB’s annual report, it spent S$7.53 billion on the purchase of land from the Singapore Land Authority (SLA) in FY2023/2024, up from S$5.39 billion in FY2022/2023.

In FY 2023, HDB also reported enhanced efforts to improve rental housing for lower-income Singaporeans, increasing expenditure in this area to about S$160 million, up from S$141 million in FY 2022.

Additionally, HDB allocated S$396 million for upgrading programs such as the Neighbourhood Renewal, Home Improvement, and Lift Upgrading programs to keep up with residents’ evolving needs.

Further, HDB revealed that S$446 million was spent on residential ancillary functions, including lease administration and the management of estate facilities like car parks.

Despite the rising cost of flats, HDB maintained its commitment to affordability, stating that “8 in 10 first-timer families have been able to service their housing loans using CPF, with little or no cash payment.”

HDB added that, since 2021, it has launched over 82,000 flats and remains on track to reach 100,000 by 2025 to meet increased demand.

In response to ongoing concerns over housing prices, HDB stated that it operates without profit and emphasized its commitment to public housing affordability, adding, “We will continue to review our housing policies and make adjustments where necessary, to support the housing needs and aspirations of Singaporeans and ensure that public housing remains fair and inclusive.”

In recent years, the Housing and Development Board (HDB) in Singapore has faced recurring public scepticism over claims that it does not profit from the sale of its Build-To-Order (BTO) flats.

To counter such narratives, HDB has issued several correction orders under the Protection from Online Falsehoods and Manipulation Act (POFMA) to individuals and organizations that have propagated these questions.

However, HDB’s reliance on POFMA to address these criticisms could be seen as heavy-handed, potentially reflecting a lack of openness to public discourse on housing affordability and transparency.