Friday, August 1, 2008

So tell me, how much do HDB flats actually cost??

I think i should start some sort of a series titled What are the actual....??. Here's another issue. This time its about the cost of building HDB flats in which 80-90% of Singaporeans live. Have a look at these letters published in the Straits Times Forum....

July 22, 2008

Affordable HDB flats: Costings don't add up

I REFER to last Wednesday's letter from the HDB, 'How HDB flats are priced affordably'. It mentioned that a new four-room flat costs close to $300,000 to develop, taking into account land, building and other costs. It did not give details of how each cost is calculated.

I remember a similar Forum letter on July 12, 2004, asking the same questions. It was mentioned that one HDB contractor built flats in Bukit Batok for $50,400 each in 2000.

Even now, factoring in higher construction cost, I estimate building cost is $100,000 to $150,000. That leaves nearly $150,000 to $200,000 for land and other costs. A single block of flats typically has 100 units. That means land (and other costs) on which a single block of flats stands costs $15 to $20 million. Can it cost so much?

For $15 to $20 million, what kind of property can one buy? In District 9 or 10, one can buy property up to 20,000 sq ft.

So is the HDB willing to release details on actual construction costs, say in the Punggol or Sengkang area?

Steven Yeo

Aug 1, 2008

HDB flats: Low figure is building costs alone

I REFER to the letter, 'Affordable HDB flats: Costings don't add up' by Mr Steven Yeo (July 22).

Mr Yeo cited a Forum page letter published on July 12, 2004, where the writer gave the construction cost of a new flat as $50,400.

This does not give the full picture of how much it costs to build flats. As HDB explained in its reply of July 23, 2004, the figures cited relate only to building works. The total construction cost of flats includes other costs such as infrastructure, piling works, lift installation, consultancy and project management, financing and purchase of land.

We have explained before in previous letters that the total cost of development in the current market is about $300,000 for a four-room flat in Punggol-Sengkang New Town. This is significantly higher than the subsidised price of a four-room flat in Punggol-Sengkang sold by HDB at about $200,000 to $260,000.

Kee Lay Cheng (Ms)
Deputy Director (Marketing and Projects)
for Director (Estate Administration and Property)
Housing and Development Board

This issue has been around for a very long time and for which the government hasn't adequately and fully replied to. If they did, the question wouldn't be around for so long, would it now. Is there anything to hide?

Its not so difficult to give a breakdown of the costs, unless of course, they fear revealing them and letting the public debate about it. Don't tell me giving a detailed breakdown would endanger Singapore's national security or something along that line. Errr...right.

Its really quite pathetic that, as citizens, we have to practically beg for such things.


Anonymous said...

If you have ever worked with a certain government agency on land-related leasing issues, you would know that the cost of land is extremely high. All this, of course, goes back to the government, so that they can decide when it is convenient for them to give it back to you (e.g. rebates, discounts disguised as subsidies, GST offset, etc). The cost of land as a percentage of the total cost of construction for each flat will not be released because it's an internal government transfer that is not open to public scrutiny.

Some have the mistaken perception that HDB makes a large profit because of this, but that's because they don't know the workings of the government, where internal agency to agency budget transfers can be done to move large sums of money around. This allows them to disguise the overall profit and loss statement of the agency in question.

To figure out the actual construction cost of each flat, you can spend some time on the government procurement portal (GeBiz) and look for tender awards for the construction of flats. Looks like the cost is roughly $180k per unit. Assuming 20% for consultancy fees, the cost would be about $220k, which is a far cry from the selling price of a new flat.

maxibounz said...

shit fuck me side ways.

i'm 19 and i'm still staying with my parents. THANKS PAP!

Ganga said...

Thank you for the insight and posing the question. Without asking the questions first, we will not seek out the answers that eventually lead to solutions.

Interestingly, the layout of my blog is very similar to that of yours. Perhaps, an example of how great minds think alike? Haha.

Well, take care and all the best - it was nice to have come across your blog.