SINGAPORE: The Housing and Development Board (HDB) recorded a deficit of S$5.38 billion (US$3.93 billion) in the 2022 financial year, of which S$4.68 billion was incurred for the Home Ownership progamme.
This scheme includes the expected loss for flats currently under development, gross loss on the sale of flats and the disbursement of Central Provident Fund (CPF) housing grants.
The record FY22 deficit, before government grant, is an increase from about S$4.37 billion in FY2021, said HDB in a press release on Tuesday (Oct 31).
HDB added it spent 22 per cent more on the Home Ownership programme in FY2022 to develop Build-to-Order (BTO) flats, and provide housing subsidies and grants, with the total amount rising from S$3.85 billion in FY2021.
HDB CEO Tan Meng Dui said: “Amidst the Russia-Ukraine conflict and severe disruptions caused by the COVID-19 pandemic, the Singapore property market stayed buoyant in 2022 with housing demand remaining strong.
“The resultant supply chain uncertainty, labour shortage and higher material cost have led to a significant increase in construction costs, of about 40 per cent since FY2019.”
He added that the increased costs have “largely been absorbed” by HDB as subsidies and grants are increased to keep flat prices affordable for Singaporeans.
Mr Tan said with HDB delivering more new flats to buyers – in 2022, it completed its largest annual number of flats and housing projects in the last five years – this has resulted in “more losses incurred from a higher number of sales completions in FY2022”.
DEFICIT UNDER HOME OWNERSHIP PROGRAMME
In FY2022, there was a net increase of about S$2.71 billion in the provision for expected loss for flats under development, compared to about S$2.26 billion in the previous financial year.
“HDB incurs significant losses every year as the amount collected from the sale of flats is lower than the total development cost of BTO flats and housing grants disbursed,” it said.
There was a higher gross loss of S$1.2 billion for sales completed in FY2022 – almost double the S$659 million figure in FY2021, said HDB.
This was due to the higher number of sales completed, with 18,478 units in FY2022 compared to 13,506 units in the previous financial year, as the construction sector progressively recovered. HDB added this represented the highest sales figure in the last five years.