HDB deficit hits nearly $2b as more flats are built
THE Housing Board's (HDB's) deficit more than doubled in the last financial year, as construction continued on the record number of new flats launched since 2011.
In the year ending March 31, it incurred a $1.93 billion deficit on home ownership alone, according to its annual report yesterday.
The Special Central Provident Fund (CPF) Housing Grant's take-up rate also spiked, after the scheme for first-time buyers was enhanced to make more households eligible in July last year, HDB said in a separate statement.
Last year's home ownership deficit was 2.7 times that of the previous financial year.
This was mainly because HDB had more projects in progress, after three years of large Build-to-Order (BTO) launches. There were 86,298 flats under construction, up from 72,737 in the previous financial year.
HDB thus had to make a larger provision for foreseeable losses 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.
HDB's overall net deficit before government grants and taxation was $1.97 billion, up from $797 million the year before.
Liang Eng Hwa, deputy chairman of the Government Parliamentary Committee for National Development, does not see the deficit as a cause for worry as long as spending remains sustainable.
"To me, it's essentially social spending," he said. "In public housing, you need to have subsidies."
From 2011 to last year, HDB launched 77,000 new flats, clearing the backlog of first-timer demand and reducing competition among applicants.
Having achieved that, it began slowing down its supply this year.
Yesterday, HDB also gave updates on policy changes introduced in the last financial year.
One change with huge effects was last year's July enhancement of the Special CPF Housing Grant, 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, the grant had benefited about 10,500 households - of whom more than 8,700 took it up after the change.
There were also measures to cater to various groups of buyers.
Singles were allowed to buy new two-room flats in July last year. As of the end of October this year, 3,700 had booked a unit.
Large three-generation flats for multi-generation families were introduced in the September BTO last year. More than 500 have been launched and, as of October, 340 had been booked.