Couples waiting for their Build-To-Order (BTO) flats will get a S$300 voucher every month for a year to offset their rent, said Minister for National Development Desmond Lee during the Committee of Supply debates on Mar. 5.
The initiative, under the Parenthood Provisional Housing Scheme (PPHS), is an interim measure while the government ramps up its supply of PPHS flats in the next year.
As it is part of the same scheme, the eligibility criteria for the vouchers is the same as that of renting a PPHS flat. This means that to qualify, families must be Singaporean with a monthly household income of S$7,000 or less, and be waiting for a BTO flat.
The voucher can be used in renting either a HDB flat or bedroom. It will kick in from July 2024.
Why S$300?
In explaining how the quantum was chosen, Lee said that the amount was calibrated to provide relief, while also mitigating the potential inflationary impact on the rental market.
He explained that in the wake of Covid-19, supply disruptions and labour shortages caused widespread delays in the construction of homes, pushing rent up.
However, Lee added that Singapore's property market is "stabilising". He cited reasons such as the ramped-up supply of housing, both public and private, as well as the three successive rounds of cooling measures.
In response, rent has moderated in both the public and private housing sectors.
The minister added:
"We expect the housing market to continue to stabilise this year.
We will continue to launch a steady supply of new homes in various locations so that there is a home for every budget."
Lower downpayment
Eligible young couples will also have to come up with a lower downpayment for their new flats.
The new measure will apply to full-time students or national servicemen who intend to book a flat under the BTO, Sale of Balance, or Open Booking of Flats schemes.
Currently, the downpayment for a new flat is 10 per cent of the flat's price for those taking a bank loan, or five per cent for buyers who are taking a HDB housing loan.
But the expansion will see the initial downpayment reduced to 2.5 per cent for all eligible couples, regardless of the type of loan.
Quick maths
What does a 2.5 per cent downpayment look like? Here's an example, courtesy of the minister.
Let's assume that the flat costs S$480,000. As such, the downpayment would be:
Before change (with bank loan): S$48,000, or 10 per cent
Before change (with HDB loan): S$24,000, or 5 per cent
After change (with any loan): S$12,000, or 2.5 per cent
Lee explained that while measures are already in place to help young couples buy homes, the government wants to "do more".
This is because many young couples still face financial difficulties when booking a flat and may rely on either their parents or their own savings to make the downpayment.
He added:
"For couples who are ready for a flat, and who have been saving up to afford the downpayment, we hope that this enhancement will help you settle down earlier and start your families earlier."
Comprehensive support
East Coast GRC Member of Parliament Cheryl Chan asked if "more comprehensive support" could be provided to young couples outside of the extended scheme.
She explained that for young couples to feel assured, it needs to be "beyond just financial support".
Lee explained that while the scheme is one mechanism to help young couples, the government has put in place an entire suite of measures to help "young Singaporeans who want to settle down, buy their first home, and start a family".
These include additional BTO launches, reduced waiting times, and various grants and priority schemes.
Top image from HDB/Facebook