HDB's Deficit Fell to $4.7 Billion. Here Is What That Subsidy Looks Like on a New 4-Room Flat

The numbers come from HDB's annual report, as The Straits Times laid them out. HDB's core activities, chiefly building and selling flats, ran a $5.13 billion shortfall. A $419 million surplus from leasing commercial properties and land brought the net figure to $4.7 billion, $1.64 billion less than in FY2024. For scale, HDB's own financial review put FY2021's deficit before the government grant at $4,367 million. FY2025 is back near that level.

The activity did not slow. HDB had 100,122 flats under construction, up from 91,941. It completed 15,417, down from 20,294, and handed keys to 19,254 households, up from 17,633.

Almost all of the deficit sits in home ownership, which came to $4 billion, down from $5.51 billion:

Ancillary functions cost more, $673 million against $570 million, partly for electrical upgrades to older blocks. Upgrading fell: HDB said some Home Improvement Programme projects were nearly done while newer ones had yet to ramp up. That is a timing effect, and likely to reverse.

HDB runs a deficit because it chooses to price new flats below cost. The Straits Times put it plainly: revenue from flat sales is not enough to cover the full cost of developing BTO flats plus the grants paid to buyers.

The accounting has a quirk that matters for reading the numbers. HDB does not wait until a flat is sold to recognise the loss on it. In its FY2021 financial review, HDB explained that because flats are sold at subsidised prices, it makes a provision for a project's estimated loss when it starts developing it. When the sales are later completed, those earlier provisions are released.

So any one year's deficit mixes the loss on flats sold that year with the expected loss on projects newly started, booked years before anyone collects keys. Heavy construction starts or rising building costs push it up early: in FY2021, HDB added $2,923 million of provisions as it started more projects and costs climbed.

For a buyer, that is the useful frame. The deficit is roughly the price difference HDB has chosen to absorb, moved through an income statement.

Line by line, most of the fall comes from the provision for flats under construction, with help from upgrading and grants.

For FY2024, Sure Boh's summary of HDB's release put the amount set aside for ongoing housing projects at $2.69 billion. For FY2025, The Straits Times reports $1.31 billion in provisions for foreseeable losses on flats under construction. If those describe the same line, it fell by about $1.38 billion, most of the $1.64 billion improvement on its own.

The other lines moved less:

FY2024 sale-loss, provision and grant figures as Sure Boh reported HDB's release; the rest from The Straits Times.

Notice what barely changed: the loss on flats actually sold, about $1.75 billion in both years. That is the closest thing in the report to a running cost of the subsidy. What fell was the up-front provision. Sure Boh reported that construction began on about 23,600 BTO flats in FY2024; the FY2025 coverage we read does not give a comparable count, so we cannot say how much of the drop is fewer new starts and how much is lower expected losses per project. HDB's own wording, as reported, does not say either.

Our read: with 100,122 flats still under construction, the provisions already booked will flow through as sales complete. A smaller deficit this year does not mean the subsidy on a new flat got smaller.

HDB does not publish a subsidy per flat, so we did the next best thing: set what HDB charged against what the open market paid for something similar.

HDB's 2025 financial year contained three BTO exercises, in July 2025, October 2025 and February 2026, offering 19,383 BTO flats between them. Those exercises carried 24 project price lines with 4-room flats, 9,359 4-rooms in all. For each, we took HDB's indicative 4-room price range from the launch's Annex A, and set the top of that range, the dearest 4-room on offer, against the median price of 4-room resale flats with 90 or more years of lease left in the same HDB town, over the same April 2025 to March 2026. Those are flats a few years old, with a median size of 93 sqm in most of these towns; the new 4-rooms are 89 to 94 sqm.

Twenty-one project launches had enough young resale flats nearby to compare (Redhill Peaks was offered twice). In all 21, the most expensive 4-room was priced below the town's young-flat median. The median gap was $204,000, or 28% of the resale price, and it ran from 16% to 43%.

BTO prices before grants. Young resale median = 4-room resale flats with 90+ years of lease left, same HDB town, April 2025 to March 2026. Not compared: Bangkit Breeze (Bukit Panjang) and Teban Heights (Jurong East), with only three young resales each, and Bishan Terraces, with none.

Because the comparison uses the dearest 4-room in each project, it is the smallest gap on offer there. The cheapest units sit further below.

Grouped by HDB's classification, the gaps look like this:

Three things stand out.

Standard flats in young towns carry big percentage gaps. Sembawang's three projects, Fernvale Plains in Sengkang and Yishun Glade all sit at 31% to 38%. Sembawang Voyage's 4-rooms ran from $304,000 to $422,000, against a Sembawang young-flat median of $664,000.

Prime flats have the smallest gaps in percentage terms, but they come with a bill later. Their medians sit around 21%, yet the dollar gap is the same $202,000 as Standard. And Prime buyers repay HDB a share of the resale price when they first sell: 10% to 14% for the FY2025 Prime projects. Toa Payoh Ascent's 4-rooms ran from $583,000 to $777,000 against a Toa Payoh young-flat median of $1.10 million, with 11% due back on resale.

Plus is the outlier, and a small sample. Only three Plus projects could be compared, and Kim Keat Crest in Toa Payoh, at 43%, pulls the median up. Its 4-rooms ran from $455,000 to $624,000 in a town whose young 4-rooms sold at a median $1.10 million, with a 6% recovery rate. Tampines Nova, the other Plus project in February, showed a 22% gap.

One wrinkle: a town median blends very different estates, so a project's gap depends on where it sits relative to the young flats that sold. Read Kim Keat Crest's 43% with that in mind. Our 4-room league table by town shows how much towns differ.

You might expect the flats with the biggest discount to draw the longest queues. HDB's final application rates for first-timer families say otherwise.

A selection of the 19 FY2025 4-room rate lines; projects HDB balloted together share one rate.

Across the year, rates ran from 0.6 to 7.2 first-timer families per 4-room. Prime-only lines had a median of 3.1, Standard-only 1.7, and the two Plus-only lines 0.8.

So Kim Keat Crest, the biggest gap in our table, drew 0.9 first-timer families per flat. Sembawang Deck and Voyage, with gaps of 36%, drew 0.6. Meanwhile Tampines, with gaps of about 22%, was the most contested at 7.2.

Our interpretation, and it is only that: buyers price far more than the discount. Location and familiarity count. So do the wait, which ran from 23 months at Tampines Bliss to 59 at Mount Pleasant Crest, and the strings: a 10-year minimum occupation period and subsidy recovery on Plus and Prime flats. For an applicant, the low-rate projects are where the subsidy is easiest to actually get. Our application rates explainer goes further into reading these numbers.

Not every subsidy goes to BTO buyers. $711 million of the FY2025 deficit was CPF housing grants paid to eligible buyers of resale flats and executive condominiums, down from $881 million a year earlier, on Sure Boh's account of HDB's FY2024 release.

For context, HDB registered 24,822 resale transactions of all flat types between April 2025 and March 2026, on PropKaki's count of HDB's resale data. Not every one of those buyers received a grant, grants vary with income and household type, and the $711 million also covers EC buyers, so we do not divide one by the other.

The point for a resale buyer is simpler. The grant is part of the same subsidy system, paid in cash rather than through a lower price. If you are weighing resale against BTO, the grant you qualify for narrows the gap in the table above. Our guides to CPF housing grants for resale flats and EC grants set out who gets what.

Nothing in the reporting says so, and we would not read it that way.

As set out above, the drop came mainly from a smaller up-front provision and lower upgrading spend, while the loss on flats actually sold held at about $1.75 billion. HDB's chief executive described the FY2024 deficit as reflecting its commitment to affordable homes, as Sure Boh reported. The FY2025 coverage gives no sign of a change in that stance.

What could move the number next year is the pipeline. HDB had 100,122 flats under construction, and every new project it starts adds a provision the year it starts. A bigger launch programme, or higher building costs, would push the deficit back up without any change to what a buyer pays. That is how FY2021's provisions rose, by HDB's own account.

So read next year's figure as a signal of how much HDB is building, not of where prices are heading. Our BTO price guide tracks prices by flat type, and November's exercise is the latest.

Three practical points, offered as opinion rather than advice.

The discount is real and large. On FY2025 launches, even the dearest new 4-room typically sat about $204,000 below a young resale 4-room in the same town. If you can wait, that is a lot of money to leave on the table.

But price it against time and strings. A resale flat is ready now. The FY2025 4-rooms quoted waits of 23 to 59 months. Plus and Prime flats come with a 10-year minimum occupation period and repay 6% to 14% of the resale price to HDB on first sale. Those costs do not appear in the gap.

Look where the queue is short. Some of the largest gaps came with the lowest application rates, Sembawang's February projects and Kim Keat Crest among them. If a specific town is not essential, the subsidy is most reachable there.

And the deficit itself is not a warning sign for buyers. It is the bill for keeping new flats well below the market, and the Government covers it with a grant: $66.23 billion since 1960.

Some limits, stated plainly.

Our gap is not HDB's subsidy. HDB does not publish a per-flat subsidy, and its deficit mixes sale losses, provisions, grants, upgrading and running costs. We compare prices only. We deliberately do not divide the deficit by flats sold.

The two flats are not the same product. A young resale 4-room is a few years into its lease and ready today. A BTO has a full 99-year lease and a wait of years. Some of the gap is the price of waiting.

The FY2024 comparison figures come from a secondary source. The provision, sale-loss and grant numbers for FY2024 are Sure Boh's account of HDB's release; the line labels may not match the annual report exactly.

Application rates are first-timer families only. Other groups apply at very different rates.

What we would not hedge on: in every FY2025 project we could test, a buyer paid well below the young-resale price for a new 4-room, and that gap is what the deficit pays for.

Two kinds of numbers, kept apart.

From the reporting: every FY2025 deficit figure, flats completed, under construction and keys issued, the government grant and the cumulative grants come from The Straits Times' report on HDB's annual report. FY2024 provision, sale-loss, construction-start and grant figures come from Sure Boh's report on HDB's FY2024 release. The FY2021 deficit and provision, and the explanation of how provisions work, come from HDB's FY2021 financial review.

PropKaki's own data:

• BTO prices are HDB's indicative 4-room price ranges from each launch's Annex A, before grants, for the July 2025, October 2025 and February 2026 exercises, with HDB's waiting times and subsidy recovery rates.
• Resale prices are HDB resale registrations for April 2025 to March 2026, by HDB town. Young flats are 4-room resales with 90 or more years of lease left. A project is compared only if its town had at least 10 of them.
• Application rates are HDB's final rates for first-timer families.
• The gaps, and the $1.64 billion and $1.38 billion differences, are simple arithmetic on the figures above.

The news:

• The Straits Times: HDB deficit narrows to $4.7b in FY2025, November 2026.
• Sure Boh: HDB records $6.34 billion deficit in FY2024, 11 November 2025.

Official:

• Housing & Development Board: Annual Report 2021/2022, Financial Review.
• HDB BTO launch releases and Annex A price lists, and HDB's final application rates, July 2025 to February 2026.

The data:

• PropKaki analysis of HDB resale transactions, April 2025 to March 2026.

Related reading: HDB upgrading programmes: HIP and NRP, HDB housing grants and BTO prices by flat type.

This is commentary by the PropKaki Editorial Desk on reporting by The Straits Times. The deficit figures belong to that reporting and to HDB; the price comparison, the application-rate reading, the framing and the opinions are ours.

It is opinion and general information, not financial or property advice, and not a valuation of any flat.

Published 13 November 2026.