RECENT news reports have highlighted the sky-high prices of new HDB flats, which range from half-a-million dollars to $700,000.

The Total Breakeven Cost of a new flat comprises Construction Cost (CC), Land Cost (LC) and Other Related Cost (ORC).

The Pinnacle@Duxton has 1,848 units in 50-storey blocks which occupy a small plot of land.

From available public-tender information, the actual CC component is $150,000 per unit. The onus is now on HDB to publicly disclose the remaining LC and ORC components.

A quick estimate of LC plus ORC is around $80,000, leading to an estimated Total Breakeven Cost of $230,000 per flat.

When launched in 2004, the average selling price was $370,000 (actual range: $288,000 to $450,000), which translates to an average profit for HDB of $140,000 per unit sold.

Four hundred and twenty- eight unsold units were recently relaunched at an average selling price of $550,000 (actual range: $450,000 to $645,000), which is $180,000 higher than initial launch prices.

This arose from the HDB 'market-based' pricing approach, as market prices of similar resale flats in the vicinity were between $593,000 to $670,000.

Applicants of new HDB flats are mostly young Singaporeans wanting to start a family.

Why, then, is the HDB not doing the right thing by passing its savings on to such citizens?

A recent Ministry of Trade and Industry reply on the electricity price hike stated that 'the Government's approach is to price goods and services at their full cost'.

Why, then, the double standards in the HDB statement that 'the prices of new HDB flats are based on the market prices of resale HDB flats, and not their costs of construction?'

For the average Singaporean, an HDB flat is the single most expensive purchase item in his or her lifetime.

Thus, it is important for HDB to clear the air once and for all by giving transparent responses to the two questions above, and disclosing detailed costs for the Pinnacle.

Mr See Leong Kit

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