Letter from Ignatius Lourdesamy Deputy Director (Marketing & Projects) for Director (Estate Administration & Property), Housing & Development Board
I REFER to the letter “It’s not all about the numbers”, (Sept 16) by Mr See Leong Kit.
It is misleading for Mr See to use the example of flats at Pinnacle@Duxton to conclude that HDB is profiteering from the sale of public housing flats. HDB is able to recover the cost for some projects, while incurring significant losses for others. Overall, in the last three years, HDB incurred an average deficit of $1,045 million a year in its home ownership programme. This cost subsidy, which has to be financed by the Government, is reported in HDB’s audited financial statements.
Why does HDB benchmark its flat prices to market in spite of these huge deficits? Because this is the fairest way of pricing new HDB flats while ensuring equitable distribution of subsidies.
How is this done? HDB first determines a flat’s equivalent market price by taking into account various factors such as location, finishes for the flat and other attributes. This price reflects the flat’s value at the point of sale. It is what people are willing to pay in the open market. HDB then sells the flat at a significant discount, which is the subsidy given by the Government. Continue reading
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