‘Drastically lowering’ BTO prices by disregarding land costs will only end up ‘hurting all Singaporeans’: Sim Ann

SINGAPORE: “Drastically lowering” the prices of Build-to-Order (BTO) flats, to the extent of disregarding land costs, would end up “hurting all Singaporeans, instead of helping them”, said Senior Minister of State for National Development Sim Ann on Sunday (Dec 11).

She was responding to a post by NCMP Leong Mun Wai (PSP) on his Facebook page and website that questioned the Government’s subsidies for Housing and Development Board (HDB) flats.

Mr Leong also said that land costs should not be included when pricing HDB flats, and that it should only include construction costs and price differences between locations.

She said that the Government cannot disregard land costs if it accepts that land values vary across locations.

“I conclude that what Mr Leong is really asking for is the Government to price BTOs much lower, whatever the justifications may be,” she added.

The Government has been increasing subsidies and grants where necessary to keep BTO prices affordable and stable, despite resale prices surging 28 per cent from 2019 to 2022, Ms Sim said.

Further increasing housing subsidies must be weighed carefully against other urgent spending priorities. It would mean reducing spending on other important things such as education, healthcare and security, the Senior Minister of State said.

“We may well also have to raise taxes to pay for the higher housing subsidies,” she said.

“Mr Leong’s response would be that the Government can charge HDB less for the land.

“By this, he means that we should draw more from our Reserves, though he has avoided saying this explicitly. We have explained a number of times that state land forms part of the nation’s Reserves.

“If HDB does not pay back into the Reserves the fair market value of the land, we would in effect be running down the value of our Reserves, to the detriment of current and future generations.”