HDB continued to step up construction and completion of new flats and provide subsidies and grants amidst supply-side uncertainties and strong demand.

In the Financial Year (FY) 2022, HDB sustained the ramp-up in new flat supply with over 75,000 flats under construction, and delivered the largest number of flats in the last five years. We also increased housing subsidies and grants, in line with the Government’s commitment to meet strong demand from first-timer homebuyers, and to keep housing affordable. In total, HDB spent 22% more on the Home Ownership Programme¹ to develop BTO flats and provide housing subsidies and grants, from a total of $3.850 billion in FY 2021 to $4.680 billion in FY 2022.

2 Minister for National Development, Mr Desmond Lee, said: “Housing is a cornerstone of our social compact. The Government will continue to support Singaporeans in their home ownership journey. In FY 2022, we increased our expenditure to keep public housing affordable and accessible for Singaporeans.”

3 “Since 2021, HDB significantly ramped up new flat supply, and is on track to launch 100,000 new housing units by 2025 to meet strong demand. In November 2022, HDB launched a bumper supply of almost 10,000 flats, the largest sales launch to date. We are also building more flats in prime and central locations, which naturally command higher market values given their attractive locations and attributes. To keep such flats affordable, accessible and inclusive for a wider range of Singaporeans, we introduced the Prime Location Public Housing (PLH) model² which provides these flats with additional subsidies – in tandem with a longer Minimum Occupation Period (MOP), subsidy recovery upon first sale and tighter resale and rental conditions. This is on top of the substantial market discounts that HDB already provides for all new flats. Moving ahead, the Standard/ Plus/ Prime framework will allow us to keep public housing, including those in choice locations, affordable to Singaporeans, ensure a good social mix, and keep the system fair and sustainable.”

4 HDB Chief Executive Officer Mr Tan Meng Dui added: “Amidst the Russia-Ukraine conflict and severe disruptions caused by the COVID-19 pandemic, the Singapore property market stayed buoyant in 2022 with housing demand remaining strong. The resultant supply chain uncertainty, labour shortage and higher material cost have led to a significant increase in construction costs, of about 40% since FY 2019. These increased costs have largely been absorbed by HDB as subsidies and grants are increased to keep flat prices affordable to support Singaporeans on their home ownership journey. With the recovery of the construction sector in the past year, HDB also delivered more new flats to our buyers, resulting in more losses incurred from a higher number of sales completions in FY 2022.”

Table 1: Key drivers of Home Ownership Programme for FY 2022

Expected loss for flats currently under development

Net increase of $2.712 billion in the provision for foreseeable loss for flats currently under development in FY 2022, as compared to $2.262 billion in FY 2021.

HDB incurs significant losses every year as the amount collected from the sale of flats is lower than the total development cost of BTO flats and housing grants disbursed.

Gross loss on the sale of flats

Higher gross loss of $1.2 billion for sales completed (i.e. keys issued to buyers) in FY 2022, almost double the $659 million in FY 2021.

With the progressive recovery of the construction sector in FY 2022, HDB completed more new flats, and thus completed more sales (18,478^ units) than in FY 2021 (13,506^ units). This was the highest sales figure in the last five years.

^These figures exclude studio apartments and flats sold on short leases.

Disbursement of CPF housing grants

$686 million of CPF housing grants was disbursed to eligible buyers of resale flats and Executive Condominiums in FY 2022, down from $849 million in FY 2021. The decrease in CPF housing grants is in line with the drop in the number of resale transactions, from 30,400 cases in FY 2021 to 27,900 cases in FY 2022.

5 Separately, in FY 2022, HDB also increased works to repair and spruce up rental flats. As a result, HDB spent about $141 million from the provision of rental flats to eligible tenants under the various rental housing schemes, up from $121 million in FY 2021.

Rejuvenating towns and flats

6 To ensure that HDB towns keep pace with the changing needs of residents, HDB regularly revitalises towns and flats through a suite of rejuvenation and upgrading programmes which are heavily subsidised or fully funded by the Government.

7 In FY 2022, HDB spent $558 million on upgrading programmes, an increase of more than 40% compared with the $392 million in FY 2021. The increase was due to the construction works under the Home Improvement Programme (HIP) which picked up pace in FY 2022 with the easing of the COVID-19 pandemic measures. In FY 2022, 33,704 flats were upgraded under HIP, which helps residents address common maintenance issues related to ageing flats. More than half of residents whose flats underwent HIP also opted to install elderly-friendly fittings at subsidised rates under the Enhancement for Active Seniors (EASE) programme.

8 HDB also spent $432 million for residential ancillary functions in FY 2022, including lease administration, provision and management of facilities such as car parks in housing estates, and planning and building administration. This was in part due to the expenditure for the upgrading of electrical supply in HDB estates, as we caught up on the earlier delays caused by the pandemic.

9 On an overall basis, HDB incurred a net deficit of $5.380 billion before government grant in FY 2022 as compared to FY 2021 deficit of $4.367 billion.

Keeping public housing affordable, accessible, and inclusive

10 HDB remains committed to keep public housing affordable and accessible. In pricing new flats, the key consideration is to ensure affordability for flat buyers, especially first-timers. HDB does not price flats to recover costs. With the significant market discounts and various housing grants, close to 90% of first-timer families have been able to service their housing loans using CPF, with little or no cash outlay. To meet the strong housing demand, HDB has also maintained a steady supply of BTO flats and is on track to launch up to 23,000 flats in 2023. We are prepared to launch a total of 100,000 flats from 2021 to 2025 and will continue to monitor the housing demand closely and make the necessary adjustments.

11 From the second half of 2024, HDB will introduce a new classification of flats – Standard, Plus and Prime – to better reflect the locational attributes of BTO projects. Plus and Prime flats will be priced with additional subsidies, on top of the substantial market discounts given to Standard flats, to keep these flats affordable. These flats will also come with subsidy recovery, longer MOP, as well as tighter conditions for resale and rental, to ensure that subsidised public housing remains fair and inclusive for Singaporeans today, and in the future.

*Note: Figures are rounded off to the nearest billion/million and percentages are rounded off to the nearest whole number

¹The Home Ownership segment covers the development and sale of flats to eligible buyers under the various home ownership schemes for public housing, and disbursement of housing grants to eligible households of new and resale flats and showed a deficit of $4.680 billion in FY 2022 (FY 2021: $3.850 billion).

²The first PLH project was launched in the November 2021 Build-To-Order (BTO) sales exercise and commenced development in FY 2022.

HDB Spent More on Public Housing in FY 2022