Did the government spend or made $28 billion from selling HDB flats?


By: Leong Sze Hian

I refer to the article in the economist titled ‘Housing in Singapore – The high life‘ dated 8 July which referred to the Singapore Government as saying that it paid over $28 billion in grants to Housing & Development Board (HDB) since its founding in the 1960s.

“It is also a good deal for the state. In 2015-16 the treasury put aside S$1.8bn, or 2.4% of the national budget, for housing, which was enough to cover HDB’s annual deficit. (The agency itself had a budget of S$17bn; it benefits from government loans but also borrows from banks and the bond market.) The government says it has paid a little over S$28bn in grants to HDB since its founding in the 1960s.”

Despite questions in Parliament and newspaper forums over the years – Singaporeans have never been given the breakdown of HDB BTO prices into land and construction costs. All we know is that HDB, a statutory board of the Singapore Government, pays market rate for the land it buys from the Singapore Land Authority (SLA), another statutory board of the Singapore Government.

The HDB has said that to “not even to factor in land costs at all for the development of public housing, is tantamount to a raid on Singapore’s national reserves”, but this practice raises the question of if there are any other country in the world which charges land for public housing at market rates.

But according to the HDB’s annual report 2015/2016, it had capital expenditure (cash outflows) of $4.9 and $5.1 billion for land and buildings. Since the ratio of land to construction costs as indicated in the annual report is 49 : 51 percent – let’s for the purpose of illustration assume that about 49 per cent of the HDB BTO prices are for land (owned by the government).

So, “the S$1.8bn, or 2.4% of the national budget, for housing, which was enough to cover HDB’s annual deficit” – may from a cashflow perspective – actually be kind of like a profit (estimate for the purpose of illustration) in selling HDB BTO flats (if land was not charged at market rates). Similarly, and conceptually – does it mean that the HDB may have made about $28 billion (estimate for the purpose of illustration) since its founding?

In their article, the economist also said: “Handouts linked to housing are one reason Singapore manages to do without a conventional tax-funded pension scheme. The theory is that almost all Singaporeans will own apartments outright by the time they finish working, in addition to having savings of their own. Those willing to downsize upon retirement—or “right-size”, as the government likes to say—do best.”

But this concept of “asset enhancement” may now be demolished by the recent remarks that the value of HDB flats will decline to zero at the end of the typical 99-year lease.


  1. Simple calculation and logic. 50 years ago bought at $10 psf land but sold as $200 psf because stacked up high rise. Take back 20 times their costs. Another 50 years from now, take back with cost of nothing or $0, sell as $2000 or $3000 psf stacked up higher and smaller flat. Who is raiding Who?

  2. This generation PAP GOVERNMENT R no more together we build SINGAPORE , today they stand for r citizens work hard for our pay . The government only think of how suck dry the citizens SAVING$$$$$$$$$

  3. Land was ‘raided’ from their original owners for a paltry sum for the sake of national development. I fail to see how charging a public service at hyper inflated market rate is justified.

  4. The land did not belong to us in anyway. It belongs to the government. Sure, government give grants. Those are expenditures. But the price of HDB and the loan interest itself is sky high and way more lucrative than giving the grants.
    99 year lease. By the time when we return the HDB to government could we claim back the land price which we paid for at market value of then? No! Then why are we paying for land?

  5. And I didn’t even mention how Temasek lose tens of billions yearly. Now they said not charging land price is like raid on national reserve. How about Temasek then? Raid the whole Singapore?

  6. IT WAS MOST UNFORTUNATE FOR US THAT 2/3 of the voters SUPPORTED Politicians who were in favour of making money by selling Water which is the most basic needs for all life to survive and commercialised medical care making more money from the less fortunate among us who are not rich. What we need are sensible policies not politicians that are worshippers of MONEY GOD AND YES MEN/WOMEN WHO ARE GOOD AT POLISHING THEIR BOSS APPLES.

  7. Think of ways to game the system then. Purchase the lowest cost lease unit for a roof over the head. Then accrue savings and invest prudently. Always have an exit plan. That exit plan may not be about retiring and dying in Singapore. Go away for comfortable vacations when it gets too stifling and crowded here. Be smarter than the people you do not like.

  8. 1) Who did you vote for?
    2) Who will you vote for?
    3) What’s in it for the non-PAP to argue for your constitutional rights and take that risk when you’ve expressly and consistently votes those rights away?

  9. The logic is very simple: if the government charges for the land or a partially for land in the price of the flat then the government must repay back the price of thd land/ part of thd land at the prevailing market price to the flat owners/lessee when the land is resumed.

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