HDB Reports S$6.34 Billion Deficit for FY2024 Amid Housing Challenges

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 represents a decrease from the record deficit of S$6.78 billion reported in the previous year. The HDB attributed the ongoing deficits to the cost of developing Build-to-Order (BTO) flats, which exceeds the revenue generated from flat sales and the disbursement of housing grants.

In detail, S$5.51 billion of the FY2024 deficit was related to the home ownership segment. This section encompasses the development and sale of flats, as well as housing grants for eligible households purchasing new or resale flats. The board’s media release highlighted that the deficit stemmed primarily from a gross loss on flat sales, anticipated losses on currently developing units, and the distribution of Central Provident Fund (CPF) housing grants.

The HDB reported a gross loss of S$1.77 billion for the 14,900 flat sales completed in FY2024, up from S$1.37 billion in FY2023. Additionally, the board allocated S$2.69 billion for provisions concerning foreseeable losses on flats still under development. In FY2024, the HDB initiated the construction of approximately 23,600 new flats.

Financial Overview and Upgrading Initiatives

HDB’s financial strategy includes making provisions for estimated losses on new housing projects, as the flats are typically sold at subsidized rates, which are lower than their development costs. These provisions are adjusted throughout the construction period, reflecting changes in costs. Once flat sales are completed and keys are issued to buyers, the anticipated losses will be reconciled against actual sales performance.

In terms of grants, the HDB reported a decrease in the total amount distributed to eligible buyers of resale flats and executive condominiums, totaling S$881 million in FY2024, down from S$999 million in the previous year. The board also continued its commitment to enhancing rental flats for lower-income Singaporeans, spending about S$159 million on various rental housing schemes, a slight decrease from S$160 million in FY2023.

The HDB has consistently invested in upgrading its estates to meet the evolving needs of residents. In FY2024, the board allocated S$532 million to upgrading programmes, such as the Home Improvement Programme (HIP) and the Lift Upgrading Programme, marking a significant increase from S$396 million in FY2023. This rise in spending was attributed to more HIP projects reaching peak construction phases.

Commitment to Affordable Housing

The board emphasized its dedication to maintaining public housing affordability and accessibility. Significant market discounts on new flats and various housing grants for first-time buyers have contributed to this goal. HDB noted that approximately nine in ten first-time families who collected keys to their BTO flats in 2024 managed to service their housing loans using their CPF savings, minimizing cash expenditures.

Looking ahead, HDB plans to launch around 55,000 new flats between 2025 and 2027. Among these, 4,000 flats will be made available each year in 2026 and 2027, aimed at reducing waiting times for homebuyers with immediate housing needs.

In addressing the board’s financial challenges, HDB CEO Tan Meng Dui stated, “Our substantial deficit in FY2024 reflects our unwavering commitment to providing affordable and quality homes for Singaporeans.” The ongoing efforts to balance the costs of development and the provision of housing support remain a critical focus for the HDB in the face of the nation’s growing housing demands.