HDB will incur S$270 million development loss from Central Weave BTO flats in Ang Mo Kio, says Desmond Lee
SINGAPORE: The Housing and Development Board (HDB) will incur an estimated development loss of about S$270 million from the Central Weave @ Ang Mo Kio Build-to-Order (BTO) project, Minister for National Development Desmond Lee said in Parliament on Tuesday (Oct 4).
The project was launched in HDB's August BTO exercise, and drew more than eight potential first-time buyers for each unit in the four-room, five-room and 3Gen flats located in the mature town of Ang Mo Kio.
Mr Lee said an estimated development loss of about S$250 million for the project would increase to about S$270 million after considering the Central Provident Fund (CPF) housing grants given to eligible buyers.
The estimated land cost for the project was S$500 million, determined independently by the chief valuer using market valuation principles, said the minister, who was responding to a question by Non-Constituency Member of Parliament (NCMP) Leong Mun Wai.
"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," said Mr Lee.
"The Government cannot use proceeds from land sales as revenue for spending in the budget."
He also said that HDB does not price new flats based on cost.
"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," said Mr Lee.
"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."
The statutory board also provides further grants such as the Enhanced CPF Housing Grant, Proximity Housing Grant and the Step-Up CPF Housing Grant among others, to help specific demographic groups with their homeownership aspirations.
Mr Lee stressed that HDB incurs a "significant" deficit every year as the amount it collects from the sale of flats is "far less" than the cost of building and housing grant disbursements.
The Housing Board recorded a deficit of S$3.85 billion for its Homeownership Programme for the financial year 2021/2022, while the average deficit incurred in the last three years was about S$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," said Mr Lee.
In September, Facebook page The Alternative View was issued a Protection from Online Falsehoods and Manipulation Act (POFMA) correction direction for suggesting that HDB profited from the sale of the Central Weave BTO flats.
At the time, MND said that HDB would incur a loss from the project as the estimated amount to be collected from the sale was lower than the estimated total development cost.