WHEN pricing an HDB flat, costs are not taken into account. Its price is based on what the flat is worth at the point of purchase.
Calling it a market-based approach, National Development Minister Mah Bow Tan said it was the fairest way of pricing new flats.

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More like marbok-based approach....

""The minister also said that as the HDB did not take into account costs, its building programme suffered losses of $530 million a year over the last three years.""

If the cost is not taken into account, how to have a loss ???? Sorry I don't know how to count aledi!

It is up to xxx to justify whatever land premium to be attributed (not charged, no cost or minimal cost to government)...in this case th eloss is a "market loss" which will be recouped when the market recovers an when the flat is returned to HDB after 99 years

I remember the sum assured for replacement cost for an exec flat - for purpose of the insurance policy - compulsory before collection of key- was only less than S$50k in the year 1995. Now is what value ? but will never be S$600k

"Mr Mah said a typical four-room flat in Sengkang costs more than $300,000 to build. This is above the $200,000 to $260,000 price at which HDB sells it."

I think a HUGE proportion will go to SLA.

Don't you think so, Mr. Mah?

the SLA take the money go buy minibonds !

Money go to SLA!
With land valuation slipping, will we be seeing 'cheaper' house from HDB?

hello this is singapore when they tell you sell at loss... you must believe...or else how to collect MILLION DOLLARS SALARY from AH GONG

They neglect to mention that costs (esp. land) are arbitrarily determined by the Authorities. Many input costs are passed through from other stat boards through marked-up transfer pricing. What goes on on their books and how do they determine costs? Usually cost-plus again and they have no incentive to lower costs, or to trim unnecessary expenses as they have guaranteed contracts.

Mah Bow Tan hiding something again? Where is the breakdown of the cost of building a HDB flat (including the cost of land)? And since the price of land takes up the huge lion's share of the net cost, and since the market rate takes into account the price of land, so it is not honest to say the cost is not partially or wholly included in the market selling rate (worth of the flat).

More likely, the actual construction cost is already factored in. And HDB will profit from the difference between construction cost and the government-determined cost of land. So the $530m 'loss' is only paper loss since the price of land is auto-determined by the government.

It is simplistic for the minister to make an unsubstantiated claim that the cost to build a flat is more than the selling price. Completely dishonest I say.

pegging land cost for public housing and what private developers are willing to pay should be reconsidered. what if an area in the outskirt is filled by enbloc down graders and PRs certainly value will shoot up. potential new homeowners may have to drop their plan.