HDB’s net deficit to remain high in the next few years: Khaw

The Ministry of National Development (MND) said the Housing and Development Board’s (HDB) net deficit will continue to be high in the next few financial years.

Speaking in Parliament on Tuesday (Jan 20), National Development Minister Khaw Boon Wan said the spike in FY2013 was due to HDB’s ramp-up in its flat-building and upgrading programmes. He was responding to a question by MP Foo Mee Har regarding the implications of HDB’s net deficit of S$1.97 billion in FY13/14 and the deficit trend in future years.

The HDB had launched over 77,000 flats, or more than 25,000 flats per year, between 2011 and 2013.

Mr Khaw noted that HDB’s deficit is largely due to the subsidy extended to new flat buyers and the disbursement of CPF Housing Grants to eligible resale flat buyers.

“Was the almost S$2 billion deficit expected? Yes it was, because as we ramped up the numbers to 25,000 homes, you should expect that the deficit should grow of that quantum,” the minister said.

“But I really don’t see our 25,000 units per year construction programme continuing for a long time. In fact, this is already year four, and we’ve started the process of ramping down for the simple reason that the number of family formations is not of that level,” he added.

The deficit in future years will depend on factors such as housing demand, HDB’s building and upgrading programmes, and developments costs and policy changes, he said.

Source : Channel NewsAsia – 20 Jan 2015

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