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reporter2
18-07-12, 22:55
http://www.straitstimes.com/Singapore/Story/STIStory_820957.html

Housing subsidies bigger than they seem: MND

Ministry explains that Housing Board generally incurs loss on BTO projects

Published on Jul 11, 2012

By RACHEL CHANG


FLAT-BUYERS receive subsidies that are bigger than they seem at first glance, said the National Development Ministry (MND).

This is because the Housing Board generally makes a loss on its build-to-order (BTO) flat projects, it said in a written reply on Monday to a parliamentary question from Ms Ellen Lee (Sembawang GRC).

Ms Lee had asked a series of questions about the cost of building an HDB flat and how housing subsidies have changed in the last 10 years.

Using the example of Waterway Banks, a BTO project in Punggol launched last November, the ministry said the 1,016-unit development cost HDB $279 million to build, while sales proceeds totalled $240 million.

HDB therefore incurred a loss of $39 million, it said, by pricing the BTO flats substantially below the market price of comparable resale flats in the same area.

So, each family actually receives 'a much higher subsidy' than the cash grants HDB hands out.

The ministry also noted that these cash grants have more than doubled in the last decade, especially for lower-income families.

Two extra grants - Additional CPF Housing Grant and Special CPF Housing Grant - were introduced in the last six years.

Together, these give households earning $1,500 or less a month and buying their first flat from HDB a total grant of $60,000.

Previously, no grants were available.

As for first-timers who buy resale flats, subsidies of up to $80,000 are available.

A decade ago, only the CPF Housing grant of up to $40,000 was available for these buyers of resale flats.

Replying to Workers' Party MP Muhamad Faisal Abdul Manap (Aljunied GRC), the ministry said 7,400 households sold their flats to settle their HDB mortgage arrears in 2010.

This represented 1.8 per cent of all outstanding HDB loan cases in 2010.

In 2011, the number of such households fell to 3,300, or 0.9 per cent of all outstanding HDB loan cases.

For families who can no longer afford their flats, HDB 'will try to render practical help', by getting them a public rental flat or offering them another loan if they want to buy a smaller flat, the ministry said.

In some cases, HDB has directly allocated a flat from its stock to these families at market rate, it said.

[email protected]

teddybear
19-07-12, 00:06
I can't get the figure right based on the statement:
"Using the example of Waterway Banks, a BTO project in Punggol launched last November, the ministry said the 1,016-unit development cost HDB $279 million to build, while sales proceeds totalled $240 million.".

1016 units costs $279m means average per unit costs $274.6k to build. Does this figure include land costs? If included means real physical construction costs is like $80k only per unit? If each unit is 1000 sqft means construction costs is $80 psf? So cheap? Quality of materials the cheapest and hence the worst?

1016 units sold for $240m means average price per unit is $236.2k. Don't remember any decent 4 room new flats selling <$350k. Means many are small units of 2-room and 3-room HDB flats?







http://www.straitstimes.com/Singapore/Story/STIStory_820957.html

Housing subsidies bigger than they seem: MND

Ministry explains that Housing Board generally incurs loss on BTO projects

Published on Jul 11, 2012

By RACHEL CHANG


FLAT-BUYERS receive subsidies that are bigger than they seem at first glance, said the National Development Ministry (MND).

This is because the Housing Board generally makes a loss on its build-to-order (BTO) flat projects, it said in a written reply on Monday to a parliamentary question from Ms Ellen Lee (Sembawang GRC).

Ms Lee had asked a series of questions about the cost of building an HDB flat and how housing subsidies have changed in the last 10 years.

Using the example of Waterway Banks, a BTO project in Punggol launched last November, the ministry said the 1,016-unit development cost HDB $279 million to build, while sales proceeds totalled $240 million.

HDB therefore incurred a loss of $39 million, it said, by pricing the BTO flats substantially below the market price of comparable resale flats in the same area.

So, each family actually receives 'a much higher subsidy' than the cash grants HDB hands out.

The ministry also noted that these cash grants have more than doubled in the last decade, especially for lower-income families.

Two extra grants - Additional CPF Housing Grant and Special CPF Housing Grant - were introduced in the last six years.

Together, these give households earning $1,500 or less a month and buying their first flat from HDB a total grant of $60,000.

Previously, no grants were available.

As for first-timers who buy resale flats, subsidies of up to $80,000 are available.

A decade ago, only the CPF Housing grant of up to $40,000 was available for these buyers of resale flats.

Replying to Workers' Party MP Muhamad Faisal Abdul Manap (Aljunied GRC), the ministry said 7,400 households sold their flats to settle their HDB mortgage arrears in 2010.

This represented 1.8 per cent of all outstanding HDB loan cases in 2010.

In 2011, the number of such households fell to 3,300, or 0.9 per cent of all outstanding HDB loan cases.

For families who can no longer afford their flats, HDB 'will try to render practical help', by getting them a public rental flat or offering them another loan if they want to buy a smaller flat, the ministry said.

In some cases, HDB has directly allocated a flat from its stock to these families at market rate, it said.

[email protected]

irisng
19-07-12, 08:27
I thought the owners have to pay back the grants when they sell their flats and if they purchase a 2nd flat direct from HDB, there is a levy incurred right?:confused:

mm63
19-07-12, 13:45
http://www.h88.com.sg/images/content/2011-11-28/waterway_ridges_prices.jpg

Assume avg price of 2-room = $100000 x 158 = 15.8mil

As Waterbank Ridges is also lumped in for 4-room, let's take 1016 - 158 = 858

Assume avg price of 4-room = $300000 x 858 = 257.4mil

Total = $273.2mil

Assume avg grant given out per unit = $40,000 x 1016 = $40.6mil

Nett = $273.2mil - $40.6mil = $232.6mil (so the stated proceeds of $240mil seems reasonable)