Desmond Lee on valuation of land for public housing

The sale of state land to the Housing and Development Board (HDB) for public housing developments does not fall under the Government Land Sales programme. Instead, the fair market value that HDB must pay for the purchase of state land for public housing is independently determined by the Chief Valuer, using well-accepted and established valuation principles. Transactions pertaining to land sold for private housing developments are not used to value the land sold to HDB for public housing developments. Instead, the Chief Valuer considers relevant public housing transactions and the specific parameters of the site. National Development Minister Desmond Lee made this point in reply to an MP's question in Parliament on Tuesday (Jan 10). He also addressed recent comments made by NCMP Leong Mun Wai in the public domain that state land sold to HDB should instead be valued at the historical cost of acquisition rather than professional valuation principles. Mr Lee said the Government spends considerable amounts of national resources to keep Build-to-Order (BTO) flats affordable. Valuing state land meant for BTO flats at its historical cost is seeking to "raid our national reserves" in promising dirt-cheap HDB flats, he said. Mr Lee pointed out that such a valuation approach is "actually dangerous for Singapore" as it does not consider market valuation principles and is not sustainable in the long run.