HDB deficit more than doubles with more homes under construction

There were 86,298 flats under construction in the last financial year, up from 72,737 the year before. -- ST PHOTO: JAMIE KOH 
There were 86,298 flats under construction in the last financial year, up from 72,737 the year before. -- ST PHOTO: JAMIE KOH 

SINGAPORE - The Housing Board's deficit more than doubled in the last financial year, as building continues on the record number of new flats launched since 2011.

In the year ended March 31, it incurred a $1.93 billion deficit on home ownership alone, according to its annual report released on Wednesday.

The take-up rate of the Special CPF Housing Grant has also spiked since it was enhanced to make more households eligible in July 2013, said the HDB in a separate statement. This grant is given to eligible first-timer citizen families who are applying to buy a 2-room, 3-room or 4-room flat in a non-mature estate and who are able to meet the eligibility conditions under the scheme.

Last year's home ownership deficit was 2.7 times that of the previous financial year.

The rise is mainly because the HDB has more projects on the go, after three years of ramped-up Build-to-Order launches. There were 86,298 flats under construction in the last financial year, up from 72,737 the year before.

The HDB thus had to make a larger provision for foreseeable loss under its operating expenses. This is the difference between the estimated development costs and the selling price of flats. It accounted for most of the home ownership deficit last year.

The overall net deficit before government grant and taxation was $1.97 billion, up from $797 million the year before.

The HDB also introduced several policy changes in the last financial year, for which it gave updates on Wednesday.

One such change was the July 2013 enhancement of the Special CPF Housing Grant, first introduced in March 2011. The income ceiling was raised and it was extended to four-room flats, making more middle-income households eligible.

As of the end of October this year, the grant has benefited about 10,500 households - of whom 8,700 took it up after the change.

The HDB also introduced measures to cater to various groups of flat buyers. Singles were allowed to buy new two-room flats in July 2013. As of the end of October this year, 3,700 have booked a unit.

Large Three-Generation flats, meant for multi-generation families, were also introduced in the September 2013 BTO exercise. More than 500 have been launched, and as of October, 340 households have booked a unit.