Computation of Land Cost in Sale Price of New HDB Flats

34 Mr Muhamad Faisal Bin Abdul Manap asked the Minister for National Development how is the land cost amount which is included in the sale price of a new HDB flat tabulated.

Mr Lawrence Wong: The key consideration in the pricing of HDB flats is to keep public housing affordable. That is why new HDB flats are priced substantially below the prices of comparable resale flats. In particular, the average monthly instalment to income ratio for first-timer families buying new flats in non-mature estates is less than a quarter of applicants’ monthly income. This means that homebuyers will require little or no cash outlay.

The selling prices set by HDB for new flats cannot cover their development costs, which include construction and land costs. That is why HDB incurs significant deficits every year in its home ownership programme.

On top of the subsidised selling price, HDB also provides housing grants of up to $80,000 to give more help to lower and middle income families buying their first home.