Originally posted by SevenEleven:
[b]A Reply by HDB in Straits Time Forum 10 Jan
2007
I REFER to the letters from Mr Viktor Ye Kok Kheong and Mr Leong
Sze Hian (ST, Jan 1 and 2, respectively) pertaining to the subsidy
for new HDB flats.
First, Mr Ye asked if it is true that the Chief Valuer values all
land in Singapore using Raffles Place as the benchmark. We wish to
state that it is not so.
It is a fundamental valuation principle that lands are valued based
on the specific attributes of the site, such as location, the
permitted use of the land, and tenure.
The Chief Valuer's valuation has to be supported by comparative
land-sales evidence.
It is simply not tenable to benchmark every plot of land to Raffles
Place pricing, as this would drive property prices beyond the reach
of most Singaporeans.
For example, state land alienated by the Singapore Land Authority
for housing in Tampines will be valued taking into account the
market values of housing in Tampines, while state land for
industrial use in Tuas will take into account industrial- land
values in Tuas, etc.
Second, Mr Leong asked HDB to reveal its land and construction
costs to prove that HDB flats are subsidised. He has missed the
point.
To understand the full extent of public-housing subsidy for new HDB
flats, one should be comparing the market value of the flats with
the sale prices charged by HDB, rather than look at the input costs
of land and building.
New flats are subsidised as they are being sold at prices that are
lower than what they would otherwise fetch in the open
market.
If this subsidy is not real, why should many flat buyers choose to
buy new flats from HDB instead of resale flats in the open market
using the CPF Housing Grant?
Third, Mr Leong asserted that HDB has not kept up with the
standards of disclosure in the private sector. He is wrong.
HDB's financial statements are prepared in accordance with the
Financial Reporting Standards, audited by the Auditor-General and
tabled in Parliament for information.
HDB's standards of disclosure and governance are no less than those
required of publicly listed companies and real-estate investment
trusts in Singapore.
Overall, HDB is unable to recover the development cost of new flats
that it offers to the public, and has incurred a deficit averaging
$390 million in its home-ownership programme in the last five
years. These figures are reported in HDB's audited financial
statements, which are publicly available for inspection and
scrutiny.
Kee Lay Cheng (Ms)
Deputy Director
(Marketing & Projects)
For Director (Estate Administration & Property)
Housing & Development Board
[/b]
HDB looses money because it
has been building flats at places where people don't want to live
in, like sengkang, punggol, jurong west etc!
If they manage to sell 90% of these flats, their profits would be
through the roof!
It now openly states a subsidy is one that is sold below the market
value.
In that case, public housing is also now very much at risk in the
face of economic crisis, when people mortage their homes for loans,
yet when the valuation falls, the banks comes after them for money
topup, which causes them to bankrupt!
All this because they want to have a 99 leasehold roof over their
heads, and enough money to pay taxes!
When property prices plummetted, I didn't quite see new flats'
prices falling just as much as well.
How can someone paid by the tax payers' monies mislead the tax
payers? Where is the moral stand of civil servants, or the
government, whom owns hdb for that matter?
Can anyone comment and give a reasonable answer to quench this
peasant's fire?
