With more flats sold and upgraded, HDB annual deficit increases to $1.717 billion

The figure comprises mainly the gross loss on the sale of flats, disbursement of CPF housing grants and the expected loss for flats that are currently under development.
The figure comprises mainly the gross loss on the sale of flats, disbursement of CPF housing grants and the expected loss for flats that are currently under development.ST PHOTO: JASMINE CHOONG

SINGAPORE - More new flats were sold and more existing flats underwent upgrading, contributing partly to a 44.4 per cent spike in the net deficit of the Housing Board (HDB) in the last financial year.

In its annual report released on Monday (Oct 22), the HDB incurred an overall deficit of $1.717 billion in the financial year of 2017/2018, up from $1.189 billion.

The report also showed an increase in the deficit for HDB's home ownership programme, from $861 million previously to $1.383 billion in the last financial year.

The figure comprises mainly the gross loss on the sale of flats, disbursement of CPF housing grants and the expected loss for flats that are currently under development.

HDB attributed the increased home ownership deficit to the fact that more residential units were awarded and more sales were completed.

In total, the number of completed sales was 26,857 units -5,407 units more than the previous financial year.

Expenditure for CPF housing grants also increased, as the grant quantum was increased last February from $30,000 to $50,000 for first-timer families buying a four-room or smaller resale flat, said HDB.

On the upgrading front, the agency saw an increased deficit of $639 million, compared with $482 million the previous financial year.

This was due to more flats undergoing upgrading, under the Home Improvement Programme, Neighbourhood Renewal Programme and Lift Upgrading Programme for housing estates, said the agency in its report.

Meanwhile, residential ancillary functions - which includes lease administration, the provision and management of facilities such as car parks, and planning and building administration - saw a dip in deficit to $338 million, from $428 million previously.

As with every year, HDB will receive a grant from the Ministry of Finance to make up for the deficit.

During the same financial year that ended March 31, 2018, HDB launched four Build-To-Order (BTO) sales exercises offering 17,192 flats across 19 projects.

Another 7,347 flats were also offered in two Sale of Balance Flats exercises.

HDB also launched a new sales mode, Re-Offer of Balance Flats, to pool together flats not selected in previous Sale of Balance Flats exercises. A total of 2,100 flats were offered under this new sales exercise.

By the end of the financial year, a total of 31,325 new flats were completed, while 65,957 flats were under construction.

 
 

The financial report also gave updates on several new initiatives.

For instance, a new HDB resale portal, which was launched in January and has halved transaction time from 16 to eight weeks, has received 3,843 applications as of March 31.

Also, as of March 31, 62 families have been placed on the Fresh Start Housing Scheme, which aims to help families with at least one child below the age of 16 who live in public rental flats to buy a two-room Flexi Flat.

HDB said it is working with social counsellors to provide support to help these families on their journey towards home ownership.

New building initiatives and technologies adopted over the past years have also helped the HDB achieve an overall construction productivity level of 14.8 per cent in 2017, exceeding its target of 14.5 per cent.

It cited factors such as prefabrication technology, standardisation of design and detailing, as well as the use of new materials and construction technology.

HDB also gave details on how it has scaled up the implementation of volumetric precast technology in 2017, in line with the national push to increase the adoption of the Design for Manufacturing & Assembly (DfMA) concept. It refers to a highly productive method of construction which moves traditional on-site work into off-site factory environments.

For instance, Prefabricated Prefinished Volumetric Construction (PPVC) was implemented in 26 per cent of the dwellings units, up from 6 per cent in the previous year.

Similarly, Prefabricated Bathroom Units (PBU) were installed in 60 per cent of the dwellings units launched, up from 26 per cent in 2016.

Where feasible, all newly launched HDB flats in 2019 will be fitted with PBUs, while one-third of the flats will be constructed using PPVC.

"With the adoption of the key DfMA initiatives in more building projects, we are on track to achieving our target of 25 per cent productivity improvement by 2020," said HDB.