HDB Reports S$6.34 Billion Deficit Amid Housing Initiatives

The Housing and Development Board (HDB) of Singapore announced a net deficit of S$6.34 billion (approximately US$4.86 billion) for the financial year 2024. This figure marks a reduction from the record deficit of S$6.78 billion reported in the previous year. The annual net deficit before government grants continues to reflect the ongoing challenges in the housing sector, where the revenue generated from flat sales does not cover the total development costs associated with Build-to-Order (BTO) flats and the housing grants provided.

Of the total deficit for FY2024, approximately S$5.51 billion was attributed to the home ownership segment, with an additional S$532 million spent on upgrading programmes. The home ownership segment includes the development and sale of flats, alongside disbursement of housing grants to eligible households purchasing both new and resale flats.

Deficit Breakdown and Home Ownership Challenges

The home ownership segment significantly contributed to the overall deficit, primarily due to gross losses on flat sales. HDB reported a gross loss of S$1.77 billion for the 14,900 flat sales completed in FY2024, an increase from S$1.37 billion in FY2023. Furthermore, the board allocated S$2.69 billion as a provision for foreseeable losses on flats currently under development during the fiscal year.

In FY2024, HDB commenced the development of approximately 23,600 new flats. The provision for estimated losses is made at the start of development, as HDB flats are typically sold at subsidised prices that are below their actual development costs. This provision is adjusted throughout the construction phase and is released upon the completion of sales, reflecting the actual loss incurred.

In terms of grants, there was a decrease in disbursements to buyers of resale flats and executive condominiums. HDB provided about S$881 million in grants for FY2024, down from S$999 million in the previous year.

Upgrading Initiatives and Future Housing Plans

HDB remains committed to enhancing public housing for lower-income Singaporeans and those requiring housing support. In FY2024, approximately S$159 million was spent on providing rental flats under various housing schemes, a slight decrease from S$160 million in FY2023.

To adapt to the evolving needs of residents, HDB regularly undertakes estate revitalisation projects funded by the government. This year, the board allocated S$532 million for upgrading initiatives, reflecting a substantial increase of 34 percent from S$396 million in FY2023. This rise in expenditure is attributed to more Home Improvement Programme (HIP) projects entering peak construction phases.

Additionally, spending on residential ancillary functions rose by 28 percent to S$570 million, compared to S$446 million in the prior fiscal year. These functions include lease administration and facility management within housing estates. The increase is particularly linked to the Electrical Load Upgrading Programme, which aims to address the growing electricity needs of residents.

HDB has reiterated its dedication to keeping public housing affordable and accessible. The board highlighted that significant market discounts for new flats and various housing grants assist first-time buyers. Notably, nine in ten first-time families receiving keys to their BTO flats in 2024 have been able to manage their HDB housing loans through their Central Provident Fund (CPF) contributions, often requiring little or no cash outlay.

Looking ahead, HDB plans to launch around 55,000 new flats from 2025 to 2027. Among these, 4,000 flats with shorter waiting times will be made available each year in 2026 and 2027, as part of efforts to reduce waiting times and expand options for potential homebuyers with urgent housing needs.

HDB CEO Tan Meng Dui stated, “Our substantial deficit in FY2024 reflects our unwavering commitment to providing affordable and quality homes for Singaporeans.”