Financial Review

Financial Results

HDB provides Singaporeans with affordable and quality homes, amidst a quality living environment where communities thrive, through its role as the master planner and developer of Singapore’s public housing towns and estates.

To help Singaporeans become home owners, the Government subsidises HDB flats with price discounts for new flats and by offering a variety of housing grants. HDB disburses housing grants to eligible households of resale flats. HDB also offers housing loans at concessionary interest rates to help eligible Singaporeans own their homes. For lower-income Singaporeans and those in need of housing support, HDB provides heavily subsidised rental flats.

To ensure that HDB towns continue to be renewed and cater to the changing needs of residents, HDB rejuvenates its towns and flats through programmes such as the Remaking Our Heartland (ROH) Programme, Neighbourhood Renewal Programme (NRP), Home Improvement Programme (HIP), and Lift Upgrading Programme (LUP). The upgrading programmes, which improve the home and living environment, are either fully funded or heavily subsidised by the Government. In addition, HDB develops and manages commercial properties like neighbourhood centres to provide a range of amenities in HDB towns for our residents’ convenience and benefit.

To reflect the full spectrum of HDB’s operations, the financial results are presented under ‘Housing’ and ‘Other Activities’ in the audited financial statements. ‘Housing’ consolidates the results of housing programmes implemented. It comprises the Home Ownership, Upgrading, Residential Ancillary Functions, Rental Flats, and Mortgage Financing segments. ‘Other Activities’ comprises the Other Rental and Related Businesses segment, and Agency and Others segment, which are commercial in nature.

In the Financial Year (FY) 2021, HDB incurred a net deficit of $4,367 million, before the government grant, as compared with $2,346 million in FY2020. The net deficit comprised the deficit from the ‘Housing’ activities of $4,735 million, offset by the surplus from the ‘Other Activities’ of $368 million in FY2021.

HDB received a grant of $4,401 million in FY2021 from the Government to finance its deficit, and to protect the reserves of the past governments in accordance with the Constitution of the Republic of Singapore. The retained earnings of HDB as at 31 March 2022 remained at zero after the transfers to the capital gains reserve to protect the past reserves.

Housing Results

The Home Ownership segment covers the development and sale of flats to eligible buyers under the various home ownership schemes for public housing, and disbursement of housing grants to eligible households of new and resale flats. The Home Ownership segment reported a deficit of $3,850 million in FY2021 as compared with $1,953 million in FY2020.

As HDB flats are sold at subsidised prices, when HDB commences the development of new projects, provision is made for the estimated loss of the projects. In FY2021, $2,923 million of additional foreseeable loss was provided, mainly due to the commencement of more new development projects during the year and the accompanying subsidies and grants associated with these new projects. The costs of construction had also continued to increase due to the tight labour market, material price increases and supply chain constraints.

For the sales completed (i.e. keys issued to buyers) in FY2021, HDB recorded a higher gross loss of $659 million, mainly due to the higher number of sales completed in FY2021 of 13,506 units, as compared with 8,124 units in FY2020. With the completion of sales, the provisions made in previous years would be released. Hence, $661 million provision made in previous years was released in FY2021. As a result, there was a net increase of $2,262 million in the provision for foreseeable loss in FY2021.

HDB also disbursed $849 million of CPF housing grants to eligible buyers of resale flats and Executive Condominiums (ECs) in FY2021 as compared with $791 million in FY2020.

The Upgrading segment reported a deficit of $392 million in FY2021, as compared with $242 million in FY2020. The programmes include the NRP, HIP, and LUP. The increase in the deficit was due to a higher expenditure for the HIP, due to the pick-up of works in FY2021 as construction activities recover with the gradual easing of COVID-19 pandemic measures.

The Residential Ancillary Functions segment includes lease administration, provision and management of ancillary facilities such as car parks in housing estates, and planning and building administration. It reported a deficit of $352 million in FY2021, as compared with $307 million in FY2020. The increase in the deficit was due to higher expenditure on improvement works.

The Rental Flats segment and Mortgage Financing segment reported deficits of $121 million and $29 million respectively in FY2021, comparable to the deficits in FY2020.

Results of Other Activities

The segment on Other Rental and Related Businesses focuses on the provision, tenancy, and management of commercial properties and land. It reported a higher surplus of $360 million in FY2021, as compared with $279 million in FY2020. This is due mainly to reduction in rental rebates to qualifying tenants in HDB shops, social-communal facilities and offices with the gradual easing of COVID-19 pandemic measures and opening up of the economy.

Capital Expenditure

Capital expenditure for the year was $8,848 million. A large proportion of the year’s capital expenditure continued to be incurred for the purchases of land and construction of public housing.

Financial Position

As at 31 March 2022, HDB’s total assets amounted to $88,107 million. Loans receivable were $36,665 million. Property, plant and equipment, investment properties, and properties under development and for sale were $44,735 million. Altogether these assets accounted for 92% of the total assets.

Capital and reserves stood at $15,204 million as at 31 March 2022. Reserves comprised capital gains reserve of $7,503 million and asset revaluation reserve of $5,237 million. The loans payable of $65,796 million comprised mainly loans from the Government and bonds.

Financing of Public Housing

HDB’s annual deficit is fully covered by a government grant. In addition, HDB receives a government grant, to preserve the capital gains attributable to past governments on disposal of the protected assets in accordance with the Constitution of the Republic of Singapore. The cumulative government grants provided to HDB since its establishment in 1960 amounted to $42,972 million.

The main loans that finance HDB’s operations comprise:

1. Mortgage financing loans that finance the housing loans granted by HDB to purchasers of flats under the public housing schemes.
2. Housing development loans that finance the development programmes and operations. There was no outstanding Housing development loans as at 31 March 2022.
3. Bonds that finance HDB’s development programmes, working capital requirements, and refinancing of existing borrowings. During the year, HDB raised $5.50 billion and redeemed $4.43 billion of unsecured Fixed Rate Notes. Total outstanding Notes under the Medium Term Note Programme was about $27 billion as at 31 March 2022.