Greater Support for Young Couples in their Home Ownership Journey
Lower upfront costs may help young first-timers enter public housing earlier, while planned supply at Chencharu and Gillman Barracks could broaden future housing choices.
From the June 2024 BTO exercise, eligible young couples’ initial downpayment will fall to 2.5%, alongside a $300 monthly temporary rental voucher from July 2024.
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Reduced initial downpayment for new flats for eligible young couples;
Temporary rental voucher for PPHS-eligible families;
Development of new housing areas to meet housing demand
At MND’s Committee of Supply debate today, Minister for National Development Mr Desmond Lee announced various initiatives to keep public housing accessible for young couples and families. He also announced the development of new housing areas at Chencharu, in Yishun, in the near term and Gillman Barracks in the longer term, to meet housing demand.
Supporting Young Couples and Families in their Home Ownership Journey
Enhancement to the Staggered Downpayment Scheme for Young Couples Eligible for Deferred Income Assessment
The Government is committed to helping Singaporeans, particularly first-timers, own a home. On top of providing significant market discounts in pricing new flats, we offer generous housing grants to further support first-timer home buyers. For example, eligible first-timer families may receive up to $80,000 of Enhanced CPF Housing Grant (EHG) when they buy a new or resale flat.
To help Singaporeans buy a flat early, young couples who are current or recent full-time students and/or National Servicemen (NSFs)[1], can apply for a new flat first and defer their income assessment for the EHG and an HDB housing loan to just before key collection. By then, they are more likely to be eligible for the EHG[2] and may also qualify for a higher loan amount after working for some time.
These couples can also benefit from the Staggered Downpayment Scheme (SDS), where the initial downpayment payable when they sign the Agreement for Lease (AFL) is halved (to 5% or 10% of the flat price)[3], if they have booked an uncompleted flat. The remaining downpayment is payable at key collection when they take up a housing loan and receive the EHG, if eligible, to pay the balance flat price.
However, some of these couples may still face difficulties paying the reduced initial downpayment, since the EHG (if eligible) is only disbursed closer to the time of key collection and, as such, they would have to pay the initial downpayment using their savings. Recognising this, HDB will provide further support to these couples starting from the June 2024 Build-To-Order (BTO) sales exercise. For couples eligible to defer their income assessment for the EHG and an HDB housing loan, the downpayment payable at the signing of the AFL will be further reduced to 2.5% of the flat price, regardless of the financing option they choose (see Table 1 for the payment schedule). This will help to ease the initial cost that these young couples have to pay when they buy a flat. More details are in Annex A.
Table 1: Enhancement to the Staggered Downpayment Scheme for Couples Eligible for Deferred Income Assessment[4]
Loan Type
Loan Type
Current
Current
Revised
Revised
Downpayment at Agreement for Lease
Downpayment at Agreement for Lease
Key Collection
Key Collection
Downpayment at Agreement for Lease
Downpayment at Agreement for Lease
Key Collection
Key Collection
Not taking housing loan
Not taking housing loan
5%
5%
95%
95%
2.5%
2.5%
97.5%
97.5%
HDB housing loan; LTV limit at 80%
HDB housing loan; LTV limit at 80%
5%
5%
15%*
15%*
17.5%
17.5%
FI housing loan; LTV limit at 75%^
FI housing loan; LTV limit at 75%^
10%
10%
15%
15%
22.5%
22.5%
FI housing loan; LTV limit at 55%^
FI housing loan; LTV limit at 55%^
10%
10%
35%
35%
42.5%
42.5%
Notes:
1. Percentage in table refers to percentage of flat price.
2. LTV refers to Loan-to-Value; FI refers to financial institution regulated by the Monetary Authority of Singapore to provide housing loans.
3. * Payment at key collection is 15% (CPF or cash) for flat applications received on or after 30 Sep 2022; 10% for flat applications received from 16 Dec 2021 to 29 Sep 2022, and 5% for flat applications received before 16 Dec 2021.
4. ^ At least 5%/10% of the flat price or value (whichever is lower) must be paid in cash before the disbursement of the loan for an FI loan with 75%/55% LTV limit.
PPHS (Open Market) Voucher for Families Awaiting the Completion of Their New Flat
The Parenthood Provisional Housing Scheme (PPHS) is a temporary housing option for families waiting for their new flats to be completed. HDB will be providing a temporary rental voucher of $300 per month under the PPHS (Open Market) Voucher scheme, which will run for a one-year period from July 2024. This is to provide greater support for PPHS-eligible families to rent an HDB flat or bedroom in the open market, while we ramp up the supply of PPHS flats to 4,000 units by the second half of 2025[5].
The scheme has been scoped carefully to strike a balance between helping families defray the cost of renting in the open market on the one hand, and mitigating the potential inflationary impact on the rental market on the other. To be eligible for the PPHS Voucher, families must meet the current PPHS criteria[6] and have a rental tenancy registered with HDB at the point of application. Eligible families will receive the voucher on a reimbursement basis, based on the number of months of their tenancy that fall within the stipulated one-year period.
Families renting from immediate family members or close relatives will not be eligible. More details will be shared closer to implementation.
New Housing Areas to Meet Housing Demand
To meet housing demand, HDB plans to launch about 19,600 BTO flats in 2024. A new housing area in Chencharu within Yishun town will be developed to offer more choices for home buyers to live closer to their families staying in the north, facilitating mutual care and support. Another area that we are studying for potential development in the longer term is Gillman Barracks located in Bukit Merah town.
· Chencharu, in Yishun
Around 10,000 homes are being planned in the new housing area at Chencharu, situated near Khatib MRT. At least 80% of these homes will be set aside for public housing. This will provide a sizeable supply of new homes for Singaporeans, including families who wish to live near their parents in the area for mutual care and support. New recreational, community and commercial facilities will be built in Chencharu to bring greater convenience to residents, while adding vibrancy to Yishun town. These will complement existing facilities at Khatib Central and HomeTeam NS Khatib. The first BTO project, comprising about 1,200 units of 2-room Flexi to 5-room flats, will be launched in June this year, with the rest of the projects to be progressively launched in the coming years.
Site map of Chencharu, in Yishun, and the first project to be launched in June 2024
· Gillman Barracks
The Gillman Barracks site is located a short distance from the city centre and adjacent to the future Greater Southern Waterfront live-work-play district. Predominantly zoned “Reserve Site” in the Master Plan 2019, it is currently occupied by various interim uses, such as office, creative lifestyle, arts, and F&B uses, with tenancies that would progressively expire by 2030.
Agencies are studying the possibility of introducing a new residential neighbourhood at this site, comprising a mix of public and private housing options, with public spaces and amenities to support an active community. Building homes in central locations will meet growing demand for housing and cater to Singaporeans’ diverse aspirations and lifestyle needs. The new residential neighbourhood could capitalise on the unique setting of Gillman Barracks, with an identity anchored on the character and charm of the former colonial barrack buildings as well as its proximity to green spaces and recreational opportunities at the Southern Ridges and Labrador Nature Park Network.
Environmental and heritage studies will commence in 2Q 2024 and are estimated to complete around 1H 2026. Findings from these studies will inform the detailed plans for the site and guide agencies in developing the site sensitively. Agencies will engage the relevant stakeholders, including existing tenants at Gillman Barracks. Existing tenants can continue to stay on site till the end of their tenancies. More details will be shared when ready.
Studies will be conducted at the Gillman Barracks site to guide future development plans
Supporting Singaporeans’ Housing Aspirations
MND and HDB are committed to meet the diverse housing needs of Singaporeans, particularly to provide more support for young couples to buy their first home. We continue to adopt a long-term approach in planning for new housing areas to keep up with housing demand, ensuring that public housing remains affordable and accessible for all Singaporeans with different budgets and needs.
Issued By : MND & HDB
Date : 5 March 2024
[1] Both parties must be full-time students or NSFs, and/or have completed full-time studies or National Service (NS) within the last 12 months before the HFE letter application.
[2] To qualify for the EHG, at least one member of the core family nucleus must be in continuous employment for at least 12 months, amongst other conditions.
[3] Generally, flat buyers must pay a downpayment of 10% (for those taking an HDB housing loan or no housing loan) or 20% (for those taking a housing loan from a Financial Institution) of the flat price when they sign the AFL, with the remaining downpayment to be paid at key collection.
[4] The payment schedule will remain the same for all other households who qualify for SDS.
[5] HDB has been steadily increasing the supply of PPHS flats from 800 in 2021 to about 2,000 flats currently. By 2025, HDB will further ramp up PPHS supply to 4,000 units, with most of the new supply ready in 2025.
[6] Households must have booked an uncompleted HDB flat and be of one of the following profiles: (a) married couple (with at least one first-timer), (b) divorced or widowed parent with children, or (c) applicants under the Fiancé/Fiancée scheme (with at least one first-timer). Households will also need to have an income not exceeding $7,000, based on the income stated in their application to buy a flat.
Annex A