Cost of building HDB flats – finally an answer?

last SG · 2009-09-03T16:30:33+00:00

To some peoples, what is so wrong about HDB being expensive, it is more affordable than HK, giving the land space we have here..and more over, you can gain f...

Amsyl SG

Wednesday, 2 September 2009, 12:36 pm

Leong Sze Hian

I refer to the replies by the Housing and Development Board (HDB) to the various letters in the Straits Times forum page over the past few weeks. (See below)

I also refer to media reports (“SGX mainboard-listed BBR secures S$104.2m HDB contract”, ChannelNewsAsia, Aug 17) Channelnewsasiaarticlehdbcontract_com.mht that Singapore Exchange’s mainboard-listed BBR Holdings has secured a S$104.2-million contract from the Housing & Development Board (HDB) to build seven blocks of flats in Yishun Neighbourhood 4.

The work comprises 864 homes, a Child Care Centre, a roof garden, communal amenities and site works, as well as contingency works.

Since there will be 864 HDB flats, the average cost per flat, inclusive of communal amenities, site works and contingency works, is about $120,602 ($104.2 million divided by 864 flats).

With the latest HDB new 4-room flats at Punggol (Punggol Residences BTO) selling at an average price of $293,000 (price range of $264,000 to $322,000 divided by 2), does it mean that the HDB stands to make a profit of about $172,398 per flat, or a profit margin of about 143 per cent?

According to the report “Application for Additional Housing Grant doubled since HDB enhanced scheme (CNA, Sep 1), it said:

“Since the additional housing grant scheme was introduced in 2006, the government has disbursed $251 million to more than 16,000 households”.

So, does it mean that the estimated profits from just one BTO project (about $149 million) as discussed above, may be enough to cover about 59 per cent of the total disbursement from 2006 to now, for the additional housing grant scheme?

Straits Times forum page letters:

“How HDB keeps it affordable” (ST, Aug 31)

“Two shortcomings : Public housing too correlated to private market, and HDB has not regulated supply” (ST, Aug 22)

“Flat hunting : Why cash over valuation ever introduced?” (Aug 20)

iamgoondu SG

The author has forgotten the other important factor , the land cost that HDB need to fork out to SLA... and that explains why HDB is never a profit generating entity.

deepak.c SG

Who owns the land?

The government?

Who does the government work for?

LKY/LHL or the people of Singapore?

I guess in Singapore it's different, because the government is a profit motivated entity just like all the big corporations.

In other governments, the surpluses are used to finance public works and social services to increase marginal social benefits. In Singapore, the $300 billion reserves are used to set up Temasek and GIC, so that he can get his family and friends to be CEO and lose $100 billion in investment value. The income derived from the citizens isn't returned to the citizens but used to benefit family and friends.

取之与民，用之与民。

取之与民，用之与自。

Should HDB land (public housing) be priced according to opportunity cost (commercial retail space) foregone?

deepak.c SG

I am abit skeptical of the figures provided by HDB and BBR.

Why?

A 1000 square feet private apartment (land, construction cost and profit) in Malaysia KL sells at RM$198,000 (SG$ 80,784). HDB per flat construction cost is SG$121,000, a discrepancy of SG$40,000 (ie if you don't include the land price and profit for the developer in the KL project).

We are not even using Malaysian labourers, shouldn't HDB cost be even cheaper than SG$80,000. I am sure Banglas and PRCs cost a fraction of the Malaysian labourers.

Are you sure HDB didn't include the cost of afew multi-storey car park (also monsoon drains, overhead bridges) to the contract to inflate the cost? (So as to show you they are not making that much from you)

The terms "inclusive of communal amenities, site works and contingency works" looks abit suspicious.

Thank ARPANET for bringing internet to the world, else I can be easily deceived into believing anything.

Link to the search page above.

jojobeach SG

The author has forgotten the other important factor , the land cost that HDB need to fork out to SLA... and that explains why HDB is never a profit generating entity.

Dude,

Singapore Land Authority (the “Authority”), a Statutory Board under the Ministry of Law (“MinLaw”),

The principal activities of the Authority are to:
(a) optimise land resources for the social and economic development of Singapore;
(b) manage all state land and buildings, land acquisitions, leases sales and leases;
(c) develop, maintain and market national land information;
(d) issue title to land, register instruments and deeds and approve cadastral surveys; and
(e) make available land for residential, commercial, educational, institutional, social and other

related purposes.- Copy and paste from SLA website.

HDB and SLA are government entities, Left pocket and right pocket of Gahmen. Understand ?

Go check out the Annual report.

for year 2008, SLA contributed the following to the government coffer.

Statutory contribution to consolidated fund ($3,580,967)
Special contribution to consolidated fund ($10,000,000)

And you forgetting property taxes from the people?

Questions ?

deepak.c SG

I thought the sale price of these apartments was only cheaper in KL, but apparently it's even cheaper in Johor Bahru.

Construction cost, land price and profit for developer.

These apartments only cost RM$172,000 (SG$70,176)

I wonder why construction cost went up another 100% when it crosses the causeway.

Does the government have 100% duties on sand, cement, iron and tiles?

Does the developer need to pay taxes during construction? Some private development needs to pay taxes.

Construction cost for our HDB apartments CANNOT be SG$121,000 per unit.

Link to the search page.

vito_corleone SG

welcome to what is known in sociology as the conflict theory

Atobe SG

After more then 30 over years of questioning, the PAP Government has never given a straight answer as to the cost of building an HDB block of flat.

Chiam See Tong had clashed with Mah Bow Tan on this issue, but had never taken up the challenge from Mah Bow Tan - to build an HDB estate, as Mah had refused to allow Chiam the same set of conditions that HDB was given.

Mah had insisted that the land cost should be based on market price which would have torpedoed Chiam's costings, as the land cost to HDB is based on some formula that will be reflected in the accounts of the various government agencies and HDB, so that every agency will show profit from the transaction on the land used.

Afterall, market price becomes meaningless when the land has been repossessed from Singaporean lease holders with compensation calculated on a fraction of prevailing market rate.

Finally, from a statutory requirement for a Main Board Listed Company to declare income that can affect the profit performance of the company - Singaporeans will get some insight into the cost of building the HDB unit.

Amsyl SG

The land was acquired by the government under the Land Acquisition Act 3-4 decades ago as these were farm lands. The owners were then paid paltry sums. I'm sure some of you who have elderly relatives who had their farm land acquired by the government can find out some figures.

Chew Bakar SG

Something like 5cents to 10cents psf back in the 70s.

dukedracula SG

i believe there's a quiet concern amonsgt them, due to their frequent defence of prices and 'financial advice' on purchases.....but they are fighting a losing battle....when it hurts the wallets of the people, no amount of sermon can undo the angst....

angel7030 SG

Something like 5cents to 10cents psf back in the 70s.

ya, everything also like to talk about last time, last time i not born yet ok, and you were runing around nake around houses..

angel7030 SG

I beg yr pardon,...other govt surpluses are used to finance public and social work meh??? not into their own pocket meh??? if so good, why are these countries still in poor and lousy state??

angel7030 SG

Wednesday, 2 September 2009, 12:36 pm

Leong Sze Hian

I refer to the replies by the Housing and Development Board (HDB) to the various letters in the Straits Times forum page over the past few weeks. (See below)

The work comprises 864 homes, a Child Care Centre, a roof garden, communal amenities and site works, as well as contingency works.

Since there will be 864 HDB flats, the average cost per flat, inclusive of communal amenities, site works and contingency works, is about $120,602 ($104.2 million divided by 864 flats).

According to the report “Application for Additional Housing Grant doubled since HDB enhanced scheme (CNA, Sep 1), it said:

Straits Times forum page letters:

“How HDB keeps it affordable” (ST, Aug 31)

“Two shortcomings : Public housing too correlated to private market, and HDB has not regulated supply” (ST, Aug 22)

“Flat hunting : Why cash over valuation ever introduced?” (Aug 20)

Dun live in HDB lah, who ask u to buy HDB??? why? u never consider you buy 300k and later can sell for 400k ar??

seyKai SG

The author has forgotten the other important factor , the land cost that HDB need to fork out to SLA... and that explains why HDB is never a profit generating entity.

do you have any idea how much the gahmen is paying the land owners?

Worcer SG

Of course they must make u buy HDB Expensive lah. Then u will pay and work for Singapore CPF until u die mah.

U think they will let u take out CPF meh.All that money is government one.Not ours ok.Unless one day u leave singapore and take out all that money mah.

But too many ppl brain wash alrdy.Its like NKF incident.Lots of ppl on the top take a lot of money without u knowing lah. Dun tell me u dun know that.Where u been living man!

Fugazzi SG

There is an interesting write-up in http://temasekreview.com/?p=12267 regarding HDB n .... recommended reading

angel3070 SG

Thank ARPANET for bringing internet to the world, else I can be easily deceived into believing anything.

Old man won't be happy. He doesn't like people to know that he is nothing but moronic bullshit. He prefers brainwashed public to vote for him.

Political leaders must be "found".

So are you a Lee or Li?

You obey the old man dictates?

Otherwise you won't be "found".

Chew Bakar SG

Old man won't be happy. He doesn't like people to know that he is nothing but moronic bullshit. He prefers brainwashed public to vote for him.

Those were the days.

Calvin86 SG

There is an interesting write-up in http://temasekreview.com/?p=12267 regarding HDB n .... recommended reading

We are over paying for a lease. Some mature estates are priced so ridicuslously with 70-80 years lease left. As the article mentioned, when we buy a HDB we sign a Tenancy/Lease Agreement not a Sales and Purchase Agreement for private properties. Yet we are expected to pay so much for the leases because most of the land supply are owned by the govt, which were forcibly bought at a cheap price in the 1970s in the name of providing affordable public housing.