News: HDB’s annual deficit rise to $2.6 billion in FY 2019/2020

Oct 26, 2020

The disbursement of Central Provident Fund (CPF) housing grants, decrease in the sales of flats, and the expected loss for flats that are currently under development have been attributed for the figures.

The Housing and Development Board (HDB) has announced an annual loss of $2.66 billion in the financial year ended 31 March, up from about $1.98 billion a year previously, according to its annual 2019/20 report released on Friday (Oct 23).  

This is the highest deficit figure incurred so far, as reported by The Straits Times.

The disbursement of Central Provident Fund (CPF) housing grants, decrease in the sales of flats, and the expected loss for flats that are currently under development have been attributed for the figures, which amounted to $3.11 billion. Meanwhile, it recorded a surplus of $466 million from “other rental and related businesses”. 

The amount of CPF housing grants disbursed to eligible resale HDB flats and executive condominium (EC) buyers also increased from $532 million in the previous financial year to $631 million in FY 2019/2020.

There were also fewer HDB homes sold in FY 2019/2020, with 11,609 units, compared with 16,608 units sold in FY 2018/2019. The lower number of flats sold has resulted in a gross loss of $721 million.

However, with fewer upgrading works in housing estates, HDB’s spent on upgrading programmes, which includes the Home Improvement Programme (HIP), saw a deficit of $440 million, down from $557 million in the previous financial year. 

The statutory board also said that it received a grant of $2.69 billion from the Ministry of Finance (MOF) this year to finance its deficit. This is lower than the $2.03 received last year. 

Despite the annual deficit, HDB Chairman Bobby Chin said that HDB will “remain resilient and focused on our goal of developing the best possible homes for Singaporeans.”

“The COVID-19 pandemic has, however, shown us that even the best laid plans can be disrupted by unforeseen challenges,” he said, as quoted by the Straits Times. 

“It has also uncovered opportunities in designing and planning future homes, especially in the areas of health and wellness.”

In September last year, HDB announced The Enhanced CPF Housing Grant (EHG), which raised income ceilings for eligible buyers, as well as the grant amount.

Meanwhile, it also scrapped the Re-Offer of Balance Flats (ROF) exercises in March, replacing it with the Open of Booking Flats.

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