SINGAPORE: The Housing and Development Board (HDB) has introduced new measures aimed at making housing more accessible for young couples, particularly those who are just starting their careers or still studying. According to the latest AsiaOne report, these changes were announced by National Development Minister Desmond Lee during an engagement session at the National University of Singapore on Wednesday (March 26). The new policies focus on easing the financial burden and offering greater flexibility to young couples as they take the next step in their housing journey.
Deferred Income Assessment (DIA) expanded
Starting from the next Build-to-Order (BTO) launch in July, young couples will benefit from an expanded Deferred Income Assessment (DIA). Under the old rules, a couple where one person was earning an income while the other was studying could only afford to purchase a small three-room flat. However, with the new changes, couples can now defer their housing loan and grant assessments until they both have started working, which could be several years later.
For example, under the old rules, a couple where one partner is earning $3,500 while the other is studying could only qualify for a three-room flat in Yishun. But with the new rules, they will now be able to purchase a larger four- or five-room flat once both have joined the workforce. By the time the keys are collected, their combined income may have increased, giving them access to a higher loan amount.
Reduced initial down payment to support young couples
In addition to the expanded DIA, a new staggered down payment scheme has been introduced to further reduce the initial payment required. Couples will now only need to pay 2.5% of the flat price as an upfront down payment, down from the previous requirement of 5%. This reduction is designed to lessen the financial strain on young couples who are just beginning to establish their careers.
To qualify, couples must have completed their studies or national service within the 12 months before applying, and at least one partner must not be more than 30 years old. This expansion will benefit a wide range of young people, including graduates from universities, polytechnics, and Institutes of Technical Education (ITE), allowing them to better plan for their future.
Boosting flat supply and shortening waiting times
Minister Lee also highlighted the government’s efforts to ramp up the supply of flats and reduce waiting times. HDB is on track to exceed its commitment to launch 100,000 BTO flats between 2021 and 2025. This is equivalent to building two Ang Mo Kio towns in less than five years. Waiting times for flats have been shortened to a median of less than four years, comparable to pre-COVID times.
Over 50,000 flats will be launched between 2025 and 2027, with at least 12,000 of them offering shorter waiting times. These initiatives will help meet the growing demand for housing and ensure that young couples can secure a home more quickly.
Addressing the affordability concerns of young buyers
Minister Lee also acknowledged that some young people might feel anxious about rising property prices, especially after seeing resale flats being sold for over $1 million. He reassured them that there are still many affordable housing options available. The newly introduced flat classification framework, which categorises flats into Standard, Plus, and Prime categories, is designed to limit speculation while ensuring fairness for buyers who do not receive additional subsidies.
Plus and Prime flats will have stricter rules, including a longer Minimum Occupation Period (MOP) and a subsidy recovery mechanism. These measures are aimed at reducing the investment value of BTO flats and ensuring that they remain affordable for first-time buyers.
Real-life stories of success: Ryan and Brina’s journey
The real impact of these new policies is already being felt by young couples like Ryan Tan and Brina Lim, who benefited from the DIA and staggered downpayment schemes. The couple applied for their flat in February 2022 while Ryan was still studying. The flexibility of the DIA scheme allowed them to defer their assessments until they were both working, which helped them secure a four-room flat in Yishun Grove.
“Without these schemes, we might have had to postpone our wedding and future plans,” said Brina, a preschool teacher. Ryan, a maritime operator, echoed her sentiments, praising the schemes for easing the financial burden during the early stages of their careers. Thanks to these changes, the couple could collect the keys to their new home in January this year, achieving their dream of homeownership sooner than expected.
With these new policies in place, young couples now have more opportunities to secure a home that meets their needs while managing their finances more effectively. The government’s continued focus on affordability and accessibility promises a brighter future for Singapore’s younger generation.