BT article fraught with serious errors: Khaw

Minister for National Development Khaw Boon Wan has responded to the errors and inaccurate figures used in a recent Business Times (BT) article.

In his latest blog post titled 'Startling But False' on Saturday, he wrote he was startled after reading the BT front page article on "Profit margins for DBSS developers 'look high'", which was published on 30 June.

It alleged that the DBSS developer's profit margin for Centrale 8 was 76 per cent, even after it had reduced its highest selling price by over S$100,000.

He pointed out that the article quoted a land price of S$82,222,000 and a maximum GFA of 721,188 square feet for the project.

"Both figures were wrong. The correct figures were respectively S$178,128,000 and 682,385 square feet. This was a huge difference of almost S$100 million. The errors led to a gross over-estimation by BT of the developer's profit and gross profit margin," wrote Minister Khaw.

He added that based on these figures alone, the profit margin would have been 26 per cent, not 76 per cent.

The Minister also said that the reduced figure was wrong, as the article had excluded key cost items such as financing, marketing and administrative costs. These are significant costs and when included, would have further lowered the profit margin for all the DBSS projects listed in the article.

He added that he has been in MND for 5 weeks, and is not sleeping well. "I am working my guts out to try to calm the market, for the good of all Singaporeans. But I can't do it alone. I need all to help," he wrote.

"HDB architects are working round the clock to ramp up BTO supply. Contractors are building up capacity to deliver the flats on time. HDB is setting BTO prices carefully to help guide the market."

Minister Khaw concluded by calling the media to do their part in their reporting.

"I hope our media can do their part too. There is some panic buying out there, by people worried that prices will continue to rise. Sensationalised articles will merely feed the frenzy."

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