HDB incurred $270m loss for Ang Mo Kio BTO project: Desmond Lee

The Central Weave @ AMK project comprises five residential blocks ranging from 21 to 32 storeys and 896 units. PHOTO: HDB

SINGAPORE - The Housing Board will incur a development loss of about $250 million for the Central Weave @ AMK Build-To-Order (BTO) project that was launched in August, National Development Minister Desmond Lee told Parliament on Tuesday.

The loss is about $270 million when Central Provident Fund (CPF) housing grants for eligible buyers are taken into consideration, he added.

Mr Lee gave these figures in reply to a question from Progress Singapore Party Non-Constituency MP Leong Mun Wai, who asked about HDB's net loss, the cost of land, and the net profit and loss position for the Government for the project.

The project in Ang Mo Kio town centre comprises five residential blocks ranging from 21 to 32 storeys and 896 units of two-room flexi, four-room, five-room, and three-generation flats.

Mr Lee said the estimated land cost for the project is about $500 million. This is determined independently by the chief valuer, using market valuation principles, he added.

Mr Lee further noted that land forms part of the nation's 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," he added.

Mr Lee said: "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 new flats are affordable to those buying their first home, he added.

Further grants, such as the Enhanced CPF Housing Grant, Proximity Housing Grant and Step-Up CPF Housing Grant, are provided to specific demographic groups.

"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," Mr Lee said.

HDB recorded a deficit of $3.85 billion for its home ownership programme for the 2021 to 2022 financial year, he noted. The average deficit incurred by HDB in the past 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," said Mr Lee.

At Central Weave @ AMK, prices range from $535,000 to $676,000 for a four-room flat, and $713,000 to $877,000 for a five-room flat or three-generation flat.

More than eight first-time applicants were vying for each of the 398 four-room flats and 372 five-room and three-generation flats offered at the project.

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