$6.225 billion spent to develop BTO flats and provide housing subsidies and grants

In the Financial Year (FY) 2023, HDB incurred a net deficit of $6.775 billion before government grants. This deficit is higher than the $5.38 billion deficit incurred in FY 2022. Of the $6.775 billion deficit, $6.225 billion was incurred for the Home Ownership segment¹. HDB incurs significant deficit 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.

2 HDB Chief Executive Officer Mr Tan Meng Dui said: “Enabling Singaporeans to own their homes remains HDB’s key priority. The substantial deficit incurred under the Home Ownership segment, which constitutes the bulk of our overall deficit, underscores our commitment to keep public housing affordable, accessible and inclusive for Singaporeans, even in the face of rising costs. With the continued ramp-up in the supply of Build-To-Order (BTO) flats, we commenced construction works on about 22,700 flats – a 50% increase from the 15,100 units in FY 2022. We continued to price BTO flats with significant market discounts, and provided additional subsidies for Prime Location Public Housing flats to ensure that these projects remained within reach to a wide range of Singaporeans and keep our HDB estates inclusive. For eligible resale flat buyers, we also increased housing grants in the last financial year to offer greater support.”

3 The $6.225 billion deficit for the Home Ownership segment stems mainly from the expected deficit for flats that are currently under development, gross deficit on the sale of flats and disbursement of CPF housing grants:

Table 1: Key drivers of Home Ownership Segment for FY 2023

Expected deficit for flats currently under development	Net increase of $3.738 billion in the provision for foreseeable deficit for flats² currently under development in FY 2023, as compared to $2.712 billion in FY 2022. This is primarily due to the continued ramp up in the supply of BTO flats, which saw about 22,700 flats commence development in FY 2023, a 50% increase from the 15,100 flats in FY 2022. Construction costs remained high, largely due to market uncertainties stemming from ongoing geopolitical conflicts, which could precipitate negative global supply and demand shocks.
Gross deficit on the sale of flats	Higher gross deficit of $1.369 billion for sales completed (i.e. keys issued to buyers) in FY 2023, as compared to $1.2 billion in FY 2022. This was due to higher construction costs for sales completed in FY 2023 (16,844^ units) compared to FY 2022 (18,478^ units), despite fewer units sold. ^These figures exclude studio apartments and flats sold on short leases.
Disbursement of CPF housing grants	HDB disbursed more grants to eligible buyers of resale flats and Executive Condominiums in FY 2023. The total of $999 million disbursed in FY 2023 is an increase of about 46% compared to the $686 million disbursed in FY 2022. To improve the affordability of resale flats for first-time buyers, the CPF Housing Grant³ was increased by up to $30,000 from 14 February 2023.

4 Separately, HDB stepped up works to upgrade, repair, and spruce up rental flats for lower-income Singaporeans and those in need of housing support in FY 2023. As a result, HDB spent about $160 million for the provision of rental flats to eligible tenants under the various rental housing schemes, up from $141 million in FY 2022.

Other Expenditure

5 To ensure that HDB towns keep pace with the evolving needs of residents, HDB regularly revitalises estates and flats through a suite of rejuvenation and upgrading programmes, which are heavily subsidised or fully funded by the Government. In FY 2023, HDB spent $396 million on upgrading programmes such as the Neighbourhood Renewal Programme, Home Improvement Programme, and Lift Upgrading Programme.

6 HDB also spent $446 million on residential ancillary functions in FY 2023, including lease administration, provision and management of facilities such as car parks in housing estates, and planning and building administration.

Keeping Public Housing Affordable, Accessible, and Inclusive

7 HDB remains committed to keeping public housing affordable and accessible. With the significant market discounts provided for new flats and various housing grants, 8 in 10 first-timer families have been able to service their housing loans using CPF, with little or no cash payment.

8 To meet the increased housing demand, HDB has ramped up the supply of BTO flats in recent years. We have launched more than 82,000 flats since 2021, and remain on track to offer a total of 100,000 flats from 2021 to 2025.

9 We will continue to review our housing policies and make adjustments where necessary, to support the housing needs and aspirations of Singaporeans and ensure that public housing remains fair and inclusive.

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

¹ The 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.

² As public housing is highly subsidised, HDB incurs deficits for BTO projects even as they commence development. The provision for this deficit has to be made upfront.

³ Eligible first-timer families can receive $80,000 in CPF Housing Grant, up from $50,000 previously, when they buy a 2-room to 4-room resale flat; or $50,000 in CPF Housing Grant, an increase from $40,000 previously, when they buy a 5-room or larger resale flat. Meanwhile, eligible singles can receive $40,000 in CPF Housing Grant, up from $25,000 previously, when they buy a 2-room to 4-room resale flat; or $25,000 in CPF Housing Grant, an increase from $20,000 previously when they buy a 5-room resale flat.

HDB Incurred Higher Expenditure in FY 2023 to Keep Public Housing Affordable