Net Loss for Central Weave BTO Development at Ang Mo Kio

Mr Leong Mun Wai asked the Minister for National Development (a) what is HDB's net loss for the Central Weave BTO project at Ang Mo Kio; (b) what is the cost of land paid by HDB to SLA for this project; and (c) what is the net profit and loss position for the Government, including HDB and SLA, for this project.

Mr Speaker, Sir, the Housing and Development Board (HDB) will incur an estimated development loss of about $250 million for the Build-To-Order (BTO) project Central Weave @ AMK. If we consider the Central Provident Fund (CPF) housing grants that HDB will extend to eligible buyers, the loss will increase further by an estimated $20 million, to about $270 million.

The estimated land cost for the project is about $500 million. This is determined independently by the Chief Valuer, using market valuation principles. Land forms part of the 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 and are protected. The Government cannot use proceeds from land sales as revenue for spending in the Budget.

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 that new flats are affordable to those buying their first home. On top of this, HDB provides further grants, such as the Enhanced CPF Housing Grant, the Proximity Housing Grant and the Step-Up CPF Housing Grant, among others, to help specific demographic groups with their home ownership aspirations.

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. For the Financial Year (FY) 2021/2022, for example, HDB recorded a deficit of $3.85 billion for its Homeownership Programme. The average deficit incurred by HDB in the last 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.

HDB will continue to ensure that public housing remains affordable and accessible for all Singaporeans.