HDB's annual deficit hits $6.34b amid construction of about 23,600 flats and upgrading programmes

The Housing and Development Board (HDB) recorded a $6.34 billion deficit for the financial year (FY) 2024, with a majority of the loss attributed to the building and sales of Build-To-Order (BTO) flats.

This amount is down slightly from the record high $6.775 billion housing deficit incurred in FY2023.

In a statement on Tuesday (Nov 11), HDB said that $5.51 billion of the deficit stemmed from the sale of flats, expected losses from flats under development, as well as the disbursement of housing grants.

HDB explained that it incurs a significant deficit 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.

The $5.51 billion losses include the sale of 14,900 new flats in FY2024, which marked a gross loss of $1.77 billion.

Another $2.69 billion of the net deficit was attributed to the provision for the anticipated loss of new housing projects under construction, where about 23,600 flats commenced development in FY2024.

HDB said the provision is estimated during the construction phase of the project because of cost changes. The fund amount is after the provision for foreseeable loss is released upon sales completion, and the actual loss from sales of flats will be reflected.

Additionally, eligible resale flat buyers and executive condominium buyers received a total disbursement of $881 million in CPF Housing Grants. About $159 million was also spent for the provision of rental flats to eligible tenants under the various rental schemes.

To better enrich HDB estates and flats, the Housing Board recorded an expenditure of $532 million on upgrading programmes such as the Home Improvement Programme (HIP), Neighbourhood Renewal Programme, and Lift Upgrading Programme (LUP).

This is 34 per cent higher than the $396 million spent in FY2023, which HDB attributed to more HIP projects reaching peak construction phase — when spending is typically highest — in FY2024.

It also spent $570 million on residential ancillary functions including lease administration, provision and management of facilities such as car parks as well as planning and building administration.

This is up by 28 per cent from $446 million spent in FY2023. The authority cited higher expenditure on the Electrical Load Upgrading Programme (ELUP), with works done on more HDB blocks.

HDB stated that it remains committed to keeping public housing affordable and accessible.

"Our substantial deficit in FY2024 reflects our unwavering commitment to providing affordable and quality homes for Singaporeans," said HDB CEO Tan Meng Dui.

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lim.kewei@asiaone.com