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04-11-2014, 12:20 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
LATEST HDB CONTRACT AWARD SHOWS THAT HDB PROFITS MILLIONS FROM BUILDING FLATS
.node-article .field-name-link-line-above-tags{float: right;}.node-article .field-name-ad-box-in-article {float: left;margin: 15px 15px 10px 0;}.node-article .field-tags{clear: both;} Post date:
3 Nov 2014 - 9:55pm
http://therealsingapore.com/sites/default/files/styles/large/public/field/image/6646679_orig.jpg?itok=u9jtLOTu (http://therealsingapore.com/sites/default/files/field/image/6646679_orig.jpg)
According to a press release from HDB and Chip Eng Seng Corporation, HDB has just awarded a contract worth $232.8 million to Chip Eng Seng for the development of HDB blocks in Woodlands.
The construction project is expected to be finished mid-2018 and will see an additional nine residential blocks being built in Woodlands neighbourhood 1.
The company is also involved in several other HDB projects including those in Jurong West Neighbourhood 6, Bukit Panjang Neighbourhood 4 and Bukit Batok Neighbourhood 1.
What is interesting about this contract is that it also reveals the rough cost to HDB of constructing HDB flats.
9 HDB blocks are being built for a total cost of about $233 million. That means each block is being built for less than $26 million.
If we conservatively estimate that each block has about 160 units, this means that the construction cost per unit is about $163,000 a unit.
When this is compared to the recent BTO prices for the July 2014 launch in other non-mature estates, one can see that there is still a huge profit margin for HDB:
http://i.imgur.com/acjrghb.png (http://i.imgur.com/acjrghb.png)
Only 2 room flats are sold below the average construction cost but unless 2 room flats make up more than half of all the flats in the blocks, there is no way that these prices result in “hundreds of millions of losses” for HDB.
In fact, HDB is making millions in profit.
Even looking at the subsidized prices, HDB is still making hundreds of thousands per flat.
How much profit is PAP making by selling each 4 room flats at the "subsidized" prices of $230,000 each?
Singaporeans take on 25 year loans to pay off these “subsidized” houses and HDB continues to complain of millions of losses for every flat.
Last year, at the National Conversation, Minister Khaw Boon Wan said
“Every year, hundreds of millions of dollars of losses were incurred by the HDB and that's why MOF has to give the HDB an annual grant, otherwise the HDB will be in the red. It cannot be forever in the red, because there's no way it can make money. Because every unit that we sell, we lose money, HDB loses money. The accounting for the HDB is deficit accounting. So if you incur a S$300-million loss, there is a grant of S$300 million that covers it. That is how we operate the HDB.
“Let us not perpetuate this talk about HDB is making money out of building houses because if it was so simple, life would be straightforward, but that's not the case.”
What do you think?
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?193274-Latest-hdb-contract-award-shows-that-hdb-profits-millions-from-building-flats&goto=newpost).
LATEST HDB CONTRACT AWARD SHOWS THAT HDB PROFITS MILLIONS FROM BUILDING FLATS
.node-article .field-name-link-line-above-tags{float: right;}.node-article .field-name-ad-box-in-article {float: left;margin: 15px 15px 10px 0;}.node-article .field-tags{clear: both;} Post date:
3 Nov 2014 - 9:55pm
http://therealsingapore.com/sites/default/files/styles/large/public/field/image/6646679_orig.jpg?itok=u9jtLOTu (http://therealsingapore.com/sites/default/files/field/image/6646679_orig.jpg)
According to a press release from HDB and Chip Eng Seng Corporation, HDB has just awarded a contract worth $232.8 million to Chip Eng Seng for the development of HDB blocks in Woodlands.
The construction project is expected to be finished mid-2018 and will see an additional nine residential blocks being built in Woodlands neighbourhood 1.
The company is also involved in several other HDB projects including those in Jurong West Neighbourhood 6, Bukit Panjang Neighbourhood 4 and Bukit Batok Neighbourhood 1.
What is interesting about this contract is that it also reveals the rough cost to HDB of constructing HDB flats.
9 HDB blocks are being built for a total cost of about $233 million. That means each block is being built for less than $26 million.
If we conservatively estimate that each block has about 160 units, this means that the construction cost per unit is about $163,000 a unit.
When this is compared to the recent BTO prices for the July 2014 launch in other non-mature estates, one can see that there is still a huge profit margin for HDB:
http://i.imgur.com/acjrghb.png (http://i.imgur.com/acjrghb.png)
Only 2 room flats are sold below the average construction cost but unless 2 room flats make up more than half of all the flats in the blocks, there is no way that these prices result in “hundreds of millions of losses” for HDB.
In fact, HDB is making millions in profit.
Even looking at the subsidized prices, HDB is still making hundreds of thousands per flat.
How much profit is PAP making by selling each 4 room flats at the "subsidized" prices of $230,000 each?
Singaporeans take on 25 year loans to pay off these “subsidized” houses and HDB continues to complain of millions of losses for every flat.
Last year, at the National Conversation, Minister Khaw Boon Wan said
“Every year, hundreds of millions of dollars of losses were incurred by the HDB and that's why MOF has to give the HDB an annual grant, otherwise the HDB will be in the red. It cannot be forever in the red, because there's no way it can make money. Because every unit that we sell, we lose money, HDB loses money. The accounting for the HDB is deficit accounting. So if you incur a S$300-million loss, there is a grant of S$300 million that covers it. That is how we operate the HDB.
“Let us not perpetuate this talk about HDB is making money out of building houses because if it was so simple, life would be straightforward, but that's not the case.”
What do you think?
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?193274-Latest-hdb-contract-award-shows-that-hdb-profits-millions-from-building-flats&goto=newpost).