HDB’s FY2024 deficit narrows by 6% to S$6.3 billion after previous year’s record expenditure

[SINGAPORE] The Housing & Development Board (HDB) on Tuesday (Nov 11) reported a net deficit of S$6.3 billion for its financial year 2024, down 6 per cent from the previous year’s record of S$6.8 billion.

As in previous years, the net deficit was largely due to a shortfall in the government’s public housing programme.

Some S$5.5 billion was spent on HDB’s home ownership programme, which covers the development and sale of Build-To-Order (BTO) flats, as well as disbursement of housing grants to eligible households of new and resale flats.

Spending on the home ownership programme in FY2024 was 11.4 per cent lower than the S$6.2 billion expenditure in the year before.

HDB chief executive officer Tan Meng Dui said that during the latest financial year, the agency rolled out a steady supply of BTO flats, commencing construction on about 23,600 flats to meet housing demand.

This was a notch higher than the 22,700 flats that started construction in FY2023, and over 50 per cent more than the 15,100 units in FY2022.

A provision was made for some S$2.7 billion in expected losses for flats under development, after the release of provisions made for completed sales. This followed a gross loss of S$1.8 billion for the 14,900 flats completed and sold in FY2024.

Gross loss

HDB said this provision is made since public housing flats are sold at subsidised prices below their development cost. It is updated during construction, due to cost changes, and will be released after flats are completed and keys issued to homebuyers.

The actual loss from sales will then be reflected as HDB’s gross loss on the sale of flats.

SEE ALSO

Kingsford places top bid of S$918.3 million or S$1,326 psf ppr for first condo plot on former Keppel Club site

Private property residents account for majority of households with 2 or more cars

More HDB flat owners refinancing to cheaper bank loans as interest rates drop to 3-year low

The S$1.8 billion gross loss was up 29.4 per cent from FY2023’s S$1.4 billion, despite more flats being completed then – 16,844 units, excluding studio apartments and flats sold on short leases.

A total of S$881 million of housing grants were disbursed to eligible buyers of resale flats and executive condominiums in FY2024, down 11.8 per cent from the previous year’s S$999 million.

Some S$159 million was spent on rental housing schemes, including upgrading and sprucing up rental flats, marginally lower than the S$160 million expenditure in FY2023.

Another S$532 million was spent on rejuvenation and upgrading various HDB towns and flats. This includes expenditure on initiatives such as the Home Improvement Programme (HIP), Neighbourhood Renewal Programme, and Lift Upgrading Programme.

The S$532 million spent in FY2024 was 34 per cent higher than the cost of S$396 million in the previous year. This was mainly due to more HIP projects reaching peak construction phase in the year, when spending is typically highest, said HDB.

Around S$570 million was also spent on residential ancillary functions in FY2024, including lease administration, the provision and management of facilities such as car parks in housing estates, and planning and building administration.

This was up 28 per cent from the S$446 million recorded in FY2024, primarily due to higher costs on the electrical load upgrading programme, which sought to upgrade the electrical power supply in more homes to “accommodate residents’ growing electricity needs”.

HDB added that it was committed to keeping public housing “affordable and accessible”, with significant market discounts for new flats and various housing grants to eligible buyers.

Around nine in 10 first-timer families who collected their BTO flat keys in 2024 can therefore service their housing loans using their Central Provident Fund with little or no cash outlay, it said.

HDB will launch 55,000 new homes from 2025 to 2027 to “meet housing demand”. Of these, 4,000 units with shorter waiting times of less than three years will be offered per year in 2026 and 2027.

“This is part of our continued effort to reduce waiting times and expand housing options for home buyers with more pressing housing needs,” said HDB. “We will continue to review and refine our housing policies where necessary, to support the housing needs and aspirations of Singaporeans.”