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[h=2]HDB: Land costs component tripled from 20 to 60%?[/h]
October 19th, 2013 |
Author: Contributions
HDB’s land capital expenditure?
Further to my
article on the HDB’s deficit of $797 million for the last financial
year, I would like to thank Lee Hock Wee for his Facebook posting – pointing out
that page 34 of the HDB annual report does mention land costs.
However, the land costs of $5.29 billion indicated is part of HDB’s capital
expenditure.
No breakdown of costs?
Without the breakdown in the cost of sales into construction, land and other
costs, we are still unable to analyse with certainty whether profits or losses
are made on our HDB flats?
In any case, we can try to speculate as follows:
Since the land costs is stated as being 60 per cent of the capital
expenditure, and if we assume that the costs attributed to land in the total
costs of flats is also 60 per cent – then one way of trying to do a comparative
analysis, is to look at the last published breakdown of the costs in the media
in 1981.
Land costs was only 20%?
In 1981, the the land component of the total costs of 5-room flats ranged
from about 20 per cent (land $19,500 divided by total costs $100,100) for New
Town, to 36 per cent (land $52,000 divided by total costs $145,200) for Central
Core.
Now it’s 60%?
So, the land costs component has increased from as low as 20 to 60 per cent
now.
Looking at the above – what do you think?
Does the HDB lose money on every flat sold?
HDB loans declining?
As to the Mortgage Financial Loans decreasing by about 15 per cent from $45.1
to $38.4 billion, in the last financial year, despite the increasing number of
HDB flats with mortgages – does it mean that more flat owners are opting for HDB
bank loans because of policy changes that make it harder to qualify for HDB
loans as well as longer loan tenures and lower interest rates for bank
loans?
No statistics?
The issue with the above trend may be
that there are no available statistics for delinquency and foreclosures under
bank loans.
Leong Sze Hian
Leong Sze Hian is the Past President of the Society of Financial Service
Professionals, an alumnus of Harvard University, Wharton Fellow, SEACeM Fellow
and an author of 4 books. He is frequently quoted in the media. He has also been
invited to speak more than 100 times in 25 countries on 5 continents. He has
served as Honorary Consul of Jamaica, Chairman of the Institute of
Administrative Management, and founding advisor to the Financial Planning
Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelors degrees and
13 professional qualifications. He blogs at [url]http://www.leongszehian.com[/URL].
Further to my
article on the HDB’s deficit of $797 million for the last financial
year, I would like to thank Lee Hock Wee for his Facebook posting – pointing out
that page 34 of the HDB annual report does mention land costs.
However, the land costs of $5.29 billion indicated is part of HDB’s capital
expenditure.
No breakdown of costs?
Without the breakdown in the cost of sales into construction, land and other
costs, we are still unable to analyse with certainty whether profits or losses
are made on our HDB flats?
In any case, we can try to speculate as follows:
Since the land costs is stated as being 60 per cent of the capital
expenditure, and if we assume that the costs attributed to land in the total
costs of flats is also 60 per cent – then one way of trying to do a comparative
analysis, is to look at the last published breakdown of the costs in the media
in 1981.
Land costs was only 20%?
In 1981, the the land component of the total costs of 5-room flats ranged
from about 20 per cent (land $19,500 divided by total costs $100,100) for New
Town, to 36 per cent (land $52,000 divided by total costs $145,200) for Central
Core.
Now it’s 60%?
So, the land costs component has increased from as low as 20 to 60 per cent
now.
Looking at the above – what do you think?
Does the HDB lose money on every flat sold?
HDB loans declining?
As to the Mortgage Financial Loans decreasing by about 15 per cent from $45.1
to $38.4 billion, in the last financial year, despite the increasing number of
HDB flats with mortgages – does it mean that more flat owners are opting for HDB
bank loans because of policy changes that make it harder to qualify for HDB
loans as well as longer loan tenures and lower interest rates for bank
loans?
No statistics?
The issue with the above trend may be
that there are no available statistics for delinquency and foreclosures under
bank loans.
Leong Sze Hian
Leong Sze Hian is the Past President of the Society of Financial Service
Professionals, an alumnus of Harvard University, Wharton Fellow, SEACeM Fellow
and an author of 4 books. He is frequently quoted in the media. He has also been
invited to speak more than 100 times in 25 countries on 5 continents. He has
served as Honorary Consul of Jamaica, Chairman of the Institute of
Administrative Management, and founding advisor to the Financial Planning
Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelors degrees and
13 professional qualifications. He blogs at [url]http://www.leongszehian.com[/URL].
