Media Statement on HDB's Pricing Approach and Development Costs for BTO Flats
Prices rising more slowly than household incomes signals maintained BTO affordability, potentially supporting first-time buyer demand despite higher land and building development costs.
Average BTO prices rose 16% in non-mature estates and 22% in mature estates from 2012 to 1-3Q2022, below 26% household-income growth through 2021.
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Table 1: Average BTO selling price per square foot
Period
Period
Non-Mature Estates
Non-Mature Estates
Mature Estates
Mature Estates
2012
2012
$311
$311
$479
$479
1-3Q2022
1-3Q2022
$362
$362
$584
$584
Growth (%)
Growth (%)
16%
16%
22%
22%
6 The increase in BTO flat prices over this period has kept within the growth in resident household incomes. From 2012 to 2021, the median resident employed household income grew by 26%. The resident employed household income at the 2nd income deciles grew at a faster rate during that period, by 32%. On top of the subsidy applied, HDB provides housing grants to help targeted demographic groups achieve their home ownership aspirations, and housing grants have also increased several times over the same period.
Table 2: Home Ownership Deficit
S/N
S/N
FY2019/20
($m)
FY2019/20
($m)
FY2020/21
($m)
FY2020/21
($m)
FY2021/22
($m)
FY2021/22
($m)
(A)
(A)
Home Ownership Deficit
[mainly from the Gross loss on flat sales completed (i.e. keys issued to buyers), CPF Housing Grants for resale flats and expected loss for flats under development. [3]]
Home Ownership Deficit
[mainly from the Gross loss on flat sales completed (i.e. keys issued to buyers), CPF Housing Grants for resale flats and expected loss for flats under development. [3]]
2,232
2,232
1,953
1,953
3,850
3,850
[3] The provision for expected loss is based on the estimated selling prices, CPF Housing Grants for HDB flats, land development costs and building development costs of projects which have commenced or are still under development. The provision for expected loss will continue to be adjusted over the course of construction period due to contract variations etc., and the finalized loss will be reported as gross loss on flat sales completed (when the keys are issued to buyers).
Table 3: For flat sales completed (i.e. keys are issued to buyers) – Breakdown of Cost of flats[4]
S/N
S/N
Breakdown of Cost of sales for sales completed
Breakdown of Cost of sales for sales completed
FY2019/20
($m)
FY2019/20
($m)
FY2020/21
($m)
FY2020/21
($m)
FY2021/22
($m)
FY2021/22
($m)
(i)
(i)
Land development costs[4]
Land development costs[4]
2,349
2,349
1,816
1,816
3,167
3,167
(ii)
(ii)
Building development costs[4]
Building development costs[4]
1,598
1,598
1,161
1,161
2,077
2,077
(iii)
(iii)
Other costs
(largely from cost of flats acquired from ex-flat owners)
Other costs
(largely from cost of flats acquired from ex-flat owners)
142
142
88
88
102
102
(B)
(B)
Cost of sales of completed flats
(i)+(ii)+(iii)
[Number of flats where keys have been issued to buyers]
Cost of sales of completed flats
(i)+(ii)+(iii)
[Number of flats where keys have been issued to buyers]
4,089
[11,609 units]
4,089
[11,609 units]
3,065
[8,124 units]
3,065
[8,124 units]
5,346
[13,506 units]
5,346
[13,506 units]
[4] Land and building development costs are the actual development cost of flats launched in earlier years.