HDB Loses $1 Billion a Year, and Why You Shouldn’t Care

Ryan Ong



Some Singaporeans asked that land costs be excluded from HDB pricing. The answer to this was a stern no. Too much social welfare, as we all know, leads to laziness, communism, and Satan worship. Or even worse, voting for the Opposition. Besides, HDB loses a billion dollars a year as is. That’s pretty bad, right? Trouble is, that “loss” is irrelevant…as an argument or otherwise:

HDB’s Losses: Not Surprised. Not Even a Bit.

We’re not amazed by the loss, and we’re not moved by it either. See, we remember HDB announced losses before, in April ’08. Back then, HDB claimed a loss of $2 billion. So actually, the deficit is shrinking.

And anyway, HDB has never hidden its losses. That’s what their financial reports claim most of the time.

(Bet you thought those reports were secret. But no, there they are in the open, where anyone with a web browser and more patience than God can understand them*).

But the most important reason we don’t care (and neither should you) are:

*They’re vaguer than Matrix Reloaded. On page 53, for example, dividend income is listed as coming from “unquoted subsidiary” and “others.” And the only “breakdowns” happen on the 114th attempt to make sense of the accounting.


  • Most of that money isn’t actually “lost”
  • It’s a terrible counter-argument anyway
  • HDB is not a company


1. Most of that money isn’t actually “lost”


HDB with lightning bolts behind it
A billion was easy. For our next trick, we’ll make your entire flat disappear.


The Singapore government’s land is handled by the SLA (Singapore Land Authority). When HDB needs to build flats, it pays to acquire the land from SLA.

Thing is, HDB has to pay market rates*. That is, they pay the same price a private developer would. But unlike private developers, HDB also has to subsidize the cost of flats. This inevitably leads to a loss: The land is purchased at a much higher price than proceeds from the flats can cover.

But while HDB takes a loss, the Singapore government as a whole doesn’t.

However much HDB pays for the land, it’s still paying much of that money to another government body (SLA). So HDB’s “losses” are more like a monetary transfer than an expenditure. And if you ask some angry flat buyers, that transfer seems to be from their wallet to the government coffers.

*At least, it’s now claimed that HDB pays market rates for land and construction costs. We don’t know the actual prices. 


2. It’s a terrible counter-argument anyway


As long as they meet our dress code, anyone can visit our archives.


There are two reasons the billion dollar loss is a terrible counter-argument.

First, it suggests it’s impossible for HDB to ever exclude land costs, or to give many more subsidies. Any more and our economy will be reduced to trading sea-shells for pomfrets or something, because look at how IN THE RED we already are.

But that isn’t true. As we said in point 1: Most of the money goes back to another government body. The “loss” is nowhere near as serious as it appears. And with an expected $3.9 billion surplus, I doubt the exclusion of land costs is entirely unfeasible.

After all, the government owns the land. Granted, if SLA doesn’t charge market rates for it, the government won’t make money. But it doesn’t stand to lose much either.

Second, the land cost argument is impossible to verify. HDB doesn’t publicize how much it pays for land, yet those unpublicized costs are part of their argument. Trying to evaluate it is like trying to pass a Maths test typed in Wingdings.

But if more information comes up, follow us on Facebook so we can update you.


3. HDB is not a company


Hands at an interview table
Let me get this right: You worked in housing, and got fired for bringing in *too many* customers?


HDB isn’t a company, and budgeting’s a different ball game for them.

HDB at its core is an administrative body. Just like MOE or MOM, it’s priority is not to generate revenue. It’s supposed to take whatever resources it’s assigned, and spend said resources to achieve a task.

The next year or quarter or whenever, HDB’s resources are topped up and they do it again.

HDB may spend a billion or two, but public housing is a necessary expense. What matters is not that they spent the money (the resources were assigned to be used), but how well the money was spent.

Remember the NParks bike saga? The big issue wasn’t that NParks had $57k to spend; the issue was how they spent it (on 26 bicycles). Apply the same principle here.

Could that billion dollars have been better used? Could we have lowered construction costs? Was the EC scheme a bad idea overall? Could we skimp on some aspects to build more units? Those are the questions that matter.

We shouldn’t be sidetracked by an impressive sounding deficit. If HDB had spent twice that, but spent it well enough that Singaporeans felt secure, there’d be less anger.

And some transparency to back Minister Khaw’s position wouldn’t hurt.

Image Credits:
NewNation.sg, Spidysg, MsBonkerz, bpsusf


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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.

Comments (11)

  1. You guys got to watch it. Cos I got a feeling that the recent posts shows that this website is soon going to be another opposition website and the posts like this one is suggesting in every aspect that it is pro opposition. You guys got to watch it. Cos you website is to teach people to be money smart and not become pro opposition or pro government website.

    1. This dude is gonna get fixed soon…

      1. He wont because there are billions of people world wide like him who only wish is to get a flat without any cost. He is just normal. Haha.

        1. You must be a nut to say such thing. They don’t want free flats but reasonable priced flats and not inflated priced flats costing beyond affordability but still claim it is affordable. If your salaries can keep with inflation and the cost of the HDB flats, no one would question the pricing.

    2. Dun think so bro..the ppl here are decent and are 100 times more financially savvy than you. Go read their other posts and youll see why..its sensible people giving sound advice…its govt policy that does not make proper financial sense..have you considered that? You actually sound like one of kim jong ill’s minions when you talk like that

      1. Agree. There are question marks on HDB way of doing accounts. The land and construction costs for shops and csrparks and other usages are lumped into the costs of the land for HDB flats. However, the profits collected from rental of shops and carparks are excluded from HDB Flats account. In other words, if these profits are brought into HDB overall account, the so called 1billion deficit will be cancelled out eventually. The Chinese will call such unethical practice as ‘eat people,’

        1. Panalysts with supporting documents are what is counts. Nobody should believe what he said simply by one condition. He is not the chief Accountant of HDB and he does not have any ideas on even one single figure, let alone talk about profit and loss. He simply imagine scenarios, pluck numbersfrom the air and got his support from people like you who intentionis ultimately a free hdb flat from gov. Thats all as bout it.

          He dont know the figures nor does

          He have access to. And if he is a good finance person , investments and assets managenent or hedge funds firm could had gotten him to work for them already.

          1. If the government is honest and transparent with the way it does business, people would not question its integrity. There are many things it does not want people to know such as CPF investment, foreign worker levy, the failed investments by GIC and THs. When the late President Ong Teng Cheong wanted to know about Singapore reserves and investments, it refused to comply by giving such lame excuses like it would take 53 years to give him the figures.
            You don’t need the rocket scientists to teach science, so it is the same with accounting. You can manipulate with accounting but ultimately, one day when you are no longer in power, other would be able to find its faults and you would pay dearly for it as it had happened in many countries.

  2. To make sense of the lose, you have to understand what is the
    singapore reserves. See this video here.

    SLA sells the land to
    HDB. HDB is made to bear the deficit. This protects the value of the
    reserves. The deficit on HDB account shows up in the current govt’s
    budget. This ensure that the current govt makes effort to balance the
    budget by spending less elsewhere/find other source of revenue.
    Otherwise, it is very easy to build and sell cheap flats without it
    reflected in the account book. Everyone is happy but in actual fact, the
    reserves get smaller (due to less land). This is to prevent a populist
    govt from making policies and funding them through the reserves without
    being accountable.

    If we don’t do proper accounting,
    just imagine this scenario: the current govt wants to become popular
    today and starts building a lot of roads, factories, parks without
    accounting for the land cost. More roads people become happy, factories
    earn more money create more jobs due to lower rental, more greenery to
    make nature lovers happy. The opportunity cost doesn’t get reflected in
    the balance sheet because the govt can cheat the system by raiding the
    reserves (land).

    We can only have a proper debate with
    proper understanding. The discussion should be about what is the
    reserves for. For the past generation, current generation or the future
    generation? It is like your ancestor leaves behind a huge sum of money
    for the future GENERATIONS and the current generation wants to spend it
    (all). Should every generation do their part and top up the reserves?

  3. The argument is flawed in the sense that the government is the custodian of Singapore’s assets. If the value of the money is not paid by HDB and subsequently the buyers, it meant that Singaporeans are giving the land away for free to these buyers.

    Argue another way – if the land has been sold to a private developer, the money could well be used for other purpose including enhanced medical, housing or transport infrastructure. Or it could be used to subsidized needy households.

    1. Where did the government land come from? Compulsory acquisition. For what? To help redevelopment. What is the mission of the HDB? To provide affordable housing.
      The author is doing us a favour by asking questions about the obscure accounting and fundamental assumptions. These questions need answers.

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