Corrections regarding falsehoods on public housing policies

The Ministry of National Development (MND) would like to point out that the videos posted by TikTok user “dr.ishhaq.jay” on 17 and 18 August 2023 (collectively “the Videos”) contain false statements of fact regarding public housing policies.

False statements of fact

1. The video posted on 17 August 2023 stated that HDB prices and sells BTO flats to make a profit. This statement is false.

Facts:

• HDB does not price and sell BTO flats to make a profit.

• Unlike private sector developers which are profit-driven, HDB prices new flats with the objective of keeping public housing affordable to help Singaporeans own their homes.

• To determine housing affordability, HDB looks at the resident household incomes, and compares them with the range of flat types and selling prices on offer at every BTO launch.

• In pricing new BTO flats, HDB establishes the market value of the flats by considering the prices of comparable resale flats nearby, and then applies a significant market discount to the assessed market values, to ensure BTO flats are affordable for flat buyers. Tiered housing grants are offered by HDB, providing targeted help to those who need it the most.

• More information on HDB’s pricing approach can be found in the MND-HDB media statement dated 7 December 2022.

2. The video posted on 18 August 2023 stated that HDB makes a profit from selling BTO flats. This statement is false.

Facts:

• HDB does not make a profit from selling BTO flats.

  • The amount collected from the sale of HDB flats in every financial year is less than the total development cost, which includes land and construction costs, and CPF housing grants disbursed to eligible homebuyers. In the last three years (FY2020, FY2021 and FY2022), HDB incurred a deficit of about S$2.68 billion per year.

3. The video posted on 18 August 2023 stated that SLA charges a premium when selling land used for HDB flats, and that SLA makes profits from land sold to HDB. These statements are false.

Facts:

• State land is sold to HDB for the development of public housing at the fair market value assessed by the Chief Valuer, not SLA, who makes the professional assessment independently based on well-accepted and established valuation principles.

• State land is part of the reserves and is not owned by SLA. As such, when state land is sold to HDB, the value paid by HDB accrues to the reserves and not to SLA.

• When state land is sold at fair market value to HDB, there is no increase in the value of the reserves. Neither are the reserves made worse-off or diminished. It is a conversion of one type of asset (land) to another (cash).

The Minister for National Development has instructed the Protection from Online Falsehoods and Manipulation Act (POFMA) Office to issue a Correction Direction to the TikTok user “dr.ishhaq.jay” in respect of his posts, and a Targeted Correction Direction to TikTok Pte. Ltd. The Directions require recipients to insert a notice, with a link to the Government’s clarification.

Additional Clarifications

MND is aware that the user has published a number of videos on these topics.

1. The videos claimed that HDB has factored in land costs into BTO flats.

Facts:

• HDB does not price flats to recover cost (including land cost and construction cost). BTO flats are priced for affordability.

• Unlike private developers who adopt a profit-based pricing approach for private residential developments to cater for a profit margin on top of development costs, HDB’s flat pricing approach is totally separate and independent from the BTO projects’ development costs.

• Instead, HDB prices new flats with affordability in mind. More information on HDB’s pricing approach can be found in the MND-HDB media statement dated 7 December 2022.

2. The videos claimed that HDB has not disclosed the cost of building flats.

Facts:

• The cost of building HDB flats is publicly available and disclosed every year in HDB’s annual report and financial statements. Construction costs are also published on HDB’s website and GeBIZ when the tender results are announced.

3. The videos claimed that the Government does not give a solution for Singaporeans to afford housing, after their monies get channelled for retirement purposes.

Facts:

• The CPF system, especially CPF contribution rates, has evolved to take into account housing needs, namely to help Singaporeans own homes.

  • CPF contributions that are channelled to a member’s CPF Ordinary Account can be used for housing.

  • As described above, HDB ensures that prices of new flats are affordable. 90% of flat buyers who collected their keys from HDB in 1H2022 used 25% or less of their monthly income to service their HDB loan instalment payments. This means that these flat buyers can service the loans using their CPF contributions, with little or no cash outlay.

  • Even so, there are Singaporeans who may be stretched. For those who face difficulties paying the monthly instalments of their HDB housing loan, HDB has in place financial assistance measures, such as deferring or reducing the monthly loan instalments for 6 months.

  • There are some older Singaporeans, especially those who bought a resale flat or bought a flat later in life, who still have to service housing loans. Members can continue to use their Ordinary Account monies for housing beyond the age of 55. More information can be found in the Factually article dated 20 August 2023.

We advise members of the public not to spread false information and/or share unverified rumours. Please visit go.gov.sg/homeownership for latest information on home ownership and public housing affordability.