HDB unable to reveal breakdown cost of flats

One of the biggest mysteries yet to be solved in Singapore is the exact breakdown cost of HDB flats. Some Singaporeans remain sceptical despite repeated claims by the government that HDB flats in the country are “heavily subsidized”.

Only a few people were convinced when HDB announced in its annual report that it suffered a $2-billion-dollar loss in 2009 due to subsidizing first-time home buyers.

Last November, Chiam See Tong, a member of the Parliament, asked HDB what the total cost of building flats were, and how much of a profit margin was added to the cost when a flat was being put up for sale?

National Development Minister Mah Bow Tan responded to the question and said, “The total cost of building flats varies based on when we build, where we build and what we build. It includes the cost of land, as well as cost of construction of the flats and ancillary services. It varies from $230,000 for a 3-room flat in Punggol to $530,000 for a 5-room flat in Tiong Bahru.”

Mr. Mah added that HDB sells its flats based on a discounted market price and not on a cost-plus-profit basis. A four-room flat is given a subsidy of 20 percent of its market price, including the Additional Housing Grant of between $5,000 and $40,000.

It would be better if the Minister could provide the exact breakdown of the flats’ land and construction cost, which he hasn't done. Even HDB did not include the figures in its annual financial report. Its online portal, HDB Infoweb, does not contain detailed information like the resale price indices from 1990 till now.

In 1981, HDB published the land cost, construction cost, selling price and the subsidy of new and old three- and four-room flats.