Mah’s explanation does not square with HDB’s annual report

[Goh Meng Seng]

Mah’s explanation does not square with HDB’s annual report

Friday, 20 November 2009, 3:03 pm | 1,401 views

Leong Sze Hian

Number of flats sold declined, contradicting Mah’s explanation on reasons for HDB’s S$2 billion deficit.

On 7 November, the Minister for National Development, Mr Mah Bow Tan, explained why the Housing and Development Board has incurred a S$2 billion loss this year. The loss is twice that of the previous year. According to Channelnewasia, Mr Mah said:

“It is making a loss and the government gives it grants every year to cover the losses, mainly because we’re giving subsidies to people to buy flats to make flats affordable to first timers. That is why we’re making a loss.”

The report went on:

“Mr Mah said the HBD makes a loss each time it gives out subsidies to first-timer home buyers, and when it sells flats lower than their cost price. The reason for the high deficit was because more flats were offered for sale last year, compared to the year before”.

Mr Mah’s remarks seem to contradict the statistics provided in the HDB’s latest annual report.

According to the annual report, HDB revealed that “the number of flats sold under the home ownership scheme this year was 4,738, which was 7,253 less than last year”.

According to its section titled “Key statistics”, the “demand for flats” was 9,870 Home Ownership flats for 2008/2009, compared to 12,449 for 2007/2008; and the “Building statistics – Dwelling units” was 3,154 in 2008 compared to 5,063 in 2007.

All these numbers show that the number of flats sold have declined, rather than increased.

The number of flats sold under the home ownership scheme declined by 60 per cent, “Demand for flats” declined by 21 per cent, and “Building statistics – Dwelling units” declined by 38 per cent, for the last year.

So, how is it possible then that “the reason for the high deficit ($2 billion) was because more flats were offered for sale last year, compared to the year before”, when the HDB statistics show that flats’ building, demand and sales, all declined substantially last year compared to the year before?

Can the Minister clarify his statement on the reasons for the doubling of the deficit from $1 billion to $2 billion for the last year?

As for Mr Mah’s assurance that HDB “sells flats lower than their cost price”, the HDB has not disclosed the breakdown of the cost of building flats, despite letters to newspaper forums requesting for this information, almost every year.

The last time this information was disclosed was in 1981, when the then National Development Minister Mr Teh Cheang Wan, disclosed the land and construction cost, as well as the subsidy and selling price, of the various flat types in six districts.

For example, a three-room flat in the central core region, cost $53,700 to construct and incurred a land cost of $40,000, and sold for $57,100.

——

Picture from Straits Times.

Parliament will sit at 1.30 pm on Monday, 23 November. The following are some of the questions tabled for the Ministry of National Development:

Mr Chiam See Tong: To ask the Minister for National Development (a) what it costs the government to build a 3-room, 4-room and 5-room HDB flat; (b) what is the profit margin which HDB adds to the cost for each of these categories of flats when it sells them to the public; and (c) whether HDB bases the selling price of flats on the prevailing market price of these flats.

Er Lee Bee Wah: To ask the Minister for National Development (a) how many new Build-To-Order flats are presently available for selection; and (b) how do the supply and demand factors influence the cost of these flats.

Mdm Cynthia Phua: To ask the Minister for National Development (a) what is the projected supply and demand of HDB flats in the next 5 years; (b) what are the parameters that are taken into account in the projection of the supply and demand of flats; (c) whether the Ministry has considered an annual buffer number of ready flats and, if so, what is the number and the parameters in arriving at that number; and (d) what measures will the Ministry consider in ensuring that first-timers get a new HDB flat within 3 years.

Dr Muhammad Faishal Ibrahim: To ask the Minister for National Development what is the current waiting time and the number/percentage of couples applying for new HDB flats under the Fiance/Fiancee Scheme.

Dr Lim Wee Kiak: To ask the Minister for National Development (a) what is the total number of permanent residents (PRs) who own HDB flats and the distribution pattern of PRs in the various public housing estates; (b) whether his Ministry will ensure that there is a good mix of PRs in the various housing estates to encourage better integration with Singaporeans; and (c) whether his Ministry will consider expanding the current policy on racial mix for HDB flats to include PRs.

Mr Lim Biow Chuan: To ask the Minister for National Development (a) how many HDB tenants have been evicted from HDB rental flats for the past 12 months due to illegal sub-letting or inability to pay rental; and (b) what are HDB’s plans to provide alternative housing for such evicted tenants if they are unable to find alternative accommodation.

Mr Lim Biow Chuan: To ask the Minister for National Development whether his Ministry will review the household income ceiling for rental flats to take into account inflation and the increased cost of living, before pegging rental rates at 30% or 50% of the market rate.

 

[scroobal]

45 years down the road and we are still asking the same question.

As long as the govt apportions infrastructure cost into each flat, the price will be high. Coupled that with political carrots like first time grants, it will be higher. Not to mention that market price of land which has always been interesting.

It may be smart to engage 3 separate think tanks from oxbridge and Ivy league to find a solution. An approach that will not have conflict of interest in the middle.

They did the same approach to NUS subsidies for students and ended up having the world's highest cost for teritary education compared to Harvard or Cambridge. So they stopped making a song and dance about NUS "subsidies".

 

[kaipoh]

45 years down the road and we are still asking the same question.

As long as the govt apportions infrastructure cost into each flat, the price will be high. Coupled that with political carrots like first time grants, it will be higher. Not to mention that market price of land which has always been interesting.

It may be smart to engage 3 separate think tanks from oxbridge and Ivy league to find a solution. An approach that will not have conflict of interest in the middle.

They did the same approach to NUS subsidies for students and ended up having the world's highest cost for teritary education compared to Harvard or Cambridge. So they stopped making a song and dance about NUS "subsidies".

This is PAP famous grotesque anecdotes, one week ago released parcel of lands to ease the property market, this week the property demand declined. Sinkees are "noodle" (stupid) Sinkees are PAP snack pack. If British Gov try this in England, you think they are so easy to bypass! Anyway gracious living is coming!!!

 

[Whats4]

so our mps job is to simply ask questions? may as well go home and sleep.

 

[johnny333]

so our mps job is to simply ask questions? may as well go home and sleep.

Go Parliament got free aircon & old man to rock you to sleep

 

[Brightkid]

Attending paliament sittings maybe have free tea-breaks and lunch provided too ? Then can save the millions of salary for counting-excercise and cooking lessons.

 

[johnny333]

Attending paliament sittings maybe have free tea-breaks and lunch provided too ? Then can save the millions of salary for counting-excercise and cooking lessons.

There's always the nearby Adelphi building. Got many massage places there. From what I've seen of the girls there it's not your everyday boring massage

 

[Goh Meng Seng]

I just hope that Mah BT doesn't retire and he stay put in Tampines.

Goh Meng Seng

 

[Papsmearer]

The last time this information was disclosed was in 1981, when the then National Development Minister Mr Teh Cheang Wan, disclosed the land and construction cost, as well as the subsidy and selling price, of the various flat types in six districts.

For example, a three-room flat in the central core region, cost $53,700 to construct and incurred a land cost of $40,000, and sold for $57,100.

I think the cost was accidentally disclosed in the 1990s by a contractor. For the smaller flats, its something like $50,000, and for the largest units something like $80K. MBT is duplicitous in explanation. Either he is an incompetent or he is a straight faced liar. The HDB suffers a lost because it acquires its land from URA or SLA. It used to acquire it directly, but now it has to use one of these agencies. These agencies in turn acquire the land at book value from whatever poor landowner they rip off. i.e. 5 or 10 cents on the dollar. They rezone it, and mark it up thousand percent to the HDB. HDB than uses this cost as their base price for land. In reality, because its all govt. agencies, its like the right hand giving to the left hand. Its should all be the same. MBT has to start with the cost of land that the govt. paid for, not what the HDB paid for. For example, if the URA expropriated some one's land for $100,000, and sells it to HDB for $500 million, the govt.'s cost is $100,000. Not $500 million. The $500 million is paper profit to the govt. that becomes real profit when the flats are sold. Therefore, there are no real subsidies involved.
The question people need to ask is why the HDB has cheap land + cheap architetural costs (same designs) + cheap labour and materials (thru low cost bidding by contractors who use cheap material and cheap overseas labour + low cost of borrowing (cheap money from the CPF) = $400K flat? (

 

[scroobal]

The way that Mah is behaving since 2006 is indicative of he leaving politics. He is acknowledged more of a technocract rather than a politician. He will end up heading some sort of infrastructure body that will be created.

I just hope that Mah BT doesn't retire and he stay put in Tampines.

Goh Meng Seng

 

[Brightkid]

There's always the nearby Adelphi building. Got many massage places there. From what I've seen of the girls there it's not your everyday boring massage

Having in the course of Paliament sittings can be package into the expenses as 'conference expenses', therefore free for the MPs attending it. Must give enticers to get the MPs to attend right ? After all, they worked so 'hard' for their residents for 5 years each term.

If go out on their own, cannot claim. Scarly kena like the British MPs, then embarrasing.

Maybe they can taopau as part of 'tea break' in between meetings ? Wifey will not know as the expense is not reflected as personal expense

 

[jw5]

The way that Mah is behaving since 2006 is indicative of he leaving politics. He is acknowledged more of a technocract rather than a politician. He will end up heading some sort of infrastructure body that will be created.

The only body that he should be heading is his own body.

 

[Goh Meng Seng]

The way that Mah is behaving since 2006 is indicative of he leaving politics. He is acknowledged more of a technocract rather than a politician. He will end up heading some sort of infrastructure body that will be created.

Dear Scroobal,

That is my greatest fear. If that happens, I will throw my challenge to the PM to name his next Minister of National Development.

Goh Meng Seng

 

[Meteor77]

You a bunch of Peasants WHY Must i explain so much. You must have trust on the government! We will grow (makan) your investments. You peasants better Say THANK YOU !

 

[Zombie]

“Mr Mah said the HBD makes a loss each time it gives out subsidies to first-timer home buyers, and when it sells flats lower than their cost price. The reason for the high deficit was because more flats were offered for sale last year, compared to the year before”.
.
.
Can the Minister clarify his statement on the reasons for the doubling of the deficit from $1 billion to $2 billion for the last year?
.
.

Leong should look at cumulative end of year figure to understand what Mah was saying.

Under Key Indicators - Project Under Construction - Residential
fy2009 - 31,058
fy2008 - 18,073
which is 72% increase...

which explains most part of the Financial Report page 46 - Provision for forseeable losses
fy2009 - $2,474m
fy2008 - $1,301m
which is 90% increase... some could be due to cost inflation..

the additional $1.2b provision (ie 2474 - 1301) contributed most to the fy2009 $2.1b deficit ("from" fy2008 $1.1b deficit)

 

[scroobal]

The good part is that NSP and you came out first. This again is an example of when the agenda can be released early. I am sure the PAP will not want to give the impression that they backed out.

Dear Scroobal,

That is my greatest fear. If that happens, I will throw my challenge to the PM to name his next Minister of National Development.

Goh Meng Seng

 

[ChaoPappyPoodle]

The last time this information was disclosed was in 1981, when the then National Development Minister Mr Teh Cheang Wan, disclosed the land and construction cost, as well as the subsidy and selling price, of the various flat types in six districts.

For example, a three-room flat in the central core region, cost $53,700 to construct and incurred a land cost of $40,000, and sold for $57,100.

I think the cost was accidentally disclosed in the 1990s by a contractor. For the smaller flats, its something like $50,000, and for the largest units something like $80K. MBT is duplicitous in explanation. Either he is an incompetent or he is a straight faced liar. The HDB suffers a lost because it acquires its land from URA or SLA. It used to acquire it directly, but now it has to use one of these agencies. These agencies in turn acquire the land at book value from whatever poor landowner they rip off. i.e. 5 or 10 cents on the dollar. They rezone it, and mark it up thousand percent to the HDB. HDB than uses this cost as their base price for land. In reality, because its all govt. agencies, its like the right hand giving to the left hand. Its should all be the same. MBT has to start with the cost of land that the govt. paid for, not what the HDB paid for. For example, if the URA expropriated some one's land for $100,000, and sells it to HDB for $500 million, the govt.'s cost is $100,000. Not $500 million. The $500 million is paper profit to the govt. that becomes real profit when the flats are sold. Therefore, there are no real subsidies involved.
The question people need to ask is why the HDB has cheap land + cheap architetural costs (same designs) + cheap labour and materials (thru low cost bidding by contractors who use cheap material and cheap overseas labour + low cost of borrowing (cheap money from the CPF) = $400K flat? (

You are all barking up the wrong tree. You know it and yet you still bark up the wrong tree. It's not just the HDB. It's the PAP and their systems in place, including the SLA, URA and HDB that are complicit in the entire scheme to masquerade huge profits as losses and monopolistic profits as subsidies.

A more appropriate question is why is the PAP, through the HDB,SLA and URA making huge profits from public housing and yet telling the public that subsidies are the reason for HDB's losses?

Stop attacking the HDB alone. You won't get very far. You know it is not just the HDB so why keep barking up that tree?

 

[littlefish]

You are all barking up the wrong tree. You know it and yet you still bark up the wrong tree. It's not just the HDB. It's the PAP and their systems in place, including the SLA, URA and HDB that are complicit in the entire scheme to masquerade huge profits as losses and monopolistic profits as subsidies.

A more appropriate question is why is the PAP, through the HDB,SLA and URA making huge profits from public housing and yet telling the public that subsidies are the reason for HDB's losses?

Stop attacking the HDB alone. You won't get very far. You know it is not just the HDB so why keep barking up that tree?

The foundation for the systems was the principal responsibility of one old man (the only remaining Old Guard still in the Cabinet). When he goes, you will see how well the systems and the elites stand up to pressure when Singaporeans start baying for their blood (the caveat is, of course, providing that Singaporeans acquire an aversion to getting screwed).

 

[coolguy]

NSP, if you got the balls.
Come to Tampines GRC and compete with me in the next
erection lah. See those sinkies believe in who.

 

[wizard]

I never believe in their number in the 1st place.

I have lose my trust in them.