here is trheir reply:
What goes into pricing of HDB flats
I REFER to the letter, 'How does HDB price its flats?' (ST, July
12), by Mr Douglas Chow Tuck Kheong.
HDB sells flats with a market subsidy in order to enable the
majority of Singaporeans to own a basic flat. The market subsidy is
provided by pricing new flats below the price of comparable resale
flats.
The price also takes into account location, design and other
specific attributes.
Affordability is assessed by looking at the debt-service ratio of
buyers. Last year, buyers of three- and four-room flats used, on
average, less than 20 per cent of their monthly income to service
their monthly loans.
This is well within the 40 per cent guideline used by financial
institutions in credit assessment, as well as international
benchmarks of household expenditure on housing.
We wish to inform Mr Chow that the construction-cost figures he
worked out relate only to buildingworks. The total construction
cost of flats includesother costs, such as that for piling works,
and consultancy and project-management fees.
TAY BOON SUN
Senior Public Relations Officer
for Director, Corporate Development
Housing & Development Board
