HDB has buffer of unsold flats

Dear Mr Mah,

I refer to your comments in the parliament as reported by Straits Times on 24 Nov 2009.

You said that ready flats are hugely popular, yet you choose not to build them. Aren’t you letting the people down by not providing for their needs when they need them?

You said that the cost of land, construction and ancillary services ranged from $230,000 to $530,000 per flat. Assuming that the cost of construction and ancillary services is about $100,000, it means that the cost of land ranged from $130,000 to $430,000. But did the govt pay $130,000 to $430,000 for the land? Traditionally, land has been acquired on the cheap from the people for as little as $1. Even if that land appreciated in value subsequently, it doesn’t change the fact that its cost to the govt is $1.

While land cost is a major contributor to HDB’s ‘deficit’, it is a major revenue generator for the SLA. So the so-called ‘large deficit’ that HDB incurs is nothing more than govt money going from left pocket to right pocket.

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