HDB to focus on rejuvenating older towns despite $2.02 billion deficit

With first-timer demand for flats already fulfilled, the Housing Board can now focus on rejuvenating older estates, reported Channel NewsAsia.

HDB manages 26 towns and housing estates, of which some are decades-old, while others are newly-built. But even as new Build-To-Order (BTO) launches are rolled out, the agency remains committed to upgrading existing estates.

In fact, it expanded its upgrading programme during the financial year 2014/2015 to more towns, resulting in the upgrading segment registering a deficit of $574 million, up from $568 million in the previous financial year.

“The theme of estate rejuvenation is going to be an on-going process. The public flats programme has been around (for) more than 40 years. We also have some estates which are ageing, even some of the non-mature estates are also ageing; it’s actually a necessary part of urban renewal,” said SLP International Executive Director Nicholas Mak.

Deficit from homeownership – comprising the gross loss on disbursement of CPF housing grants, the sale of flats as well as the expected loss for flats currently under development – stood at $1.75 billion, down nine percent from the previous year.

Overall, HDB saw its net deficit, before government grants, increase to $2.02 billion from $1.97 billion previously.

Meanwhile, industry watchers have noted that application rates in recent sales exercises indicate that the backlog for first-time applicants has been significantly reduced, which could see HDB re-calibrating its flat allocation.

“They left the majority of the numbers to sell to families – those buying under the family scheme. (As for) the singles, there were flats for them, but application rates for singles were extremely high; because of the limited number of flats made available, the application rate was also quite high,” said Eugene Lim, Key Executive Officer at ERA Realty Network.

“So I think going forward, HDB is likely to recalibrate the number of flats they are putting onstream to cater to these groups which particularly have higher application rates so as to balance the table.”

HDB launched five BTO sales exercises for the financial year ending March 2015, offering nearly 20,000 flats across 27 projects.

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg