Singapore’s birthrate can be boosted by modifying housing policies

What are the best HDB flats in Singapore for couples with 3 kids or more?

Singapore’s total fertility rate (TFR), measured per female, has dropped to a record-low of 0.97 by 2023. This is a sharp decline from the high of over 1.7 at the beginning 1990s.

In the mid-1990s, there were over 46,000 resident births. By 2023, that number will be down to 30,510.

The TFR may jump dramatically in 2024, which is the auspicious Chinese Year of the Dragon.

Singapore’s acute baby shortage is a result of its many policies that encourage marriage and parenthood.

Housing measures are available to encourage marriage. One of the most important is the ability for local couples to purchase HDB flats at subsidised rates. Young couples who marry will benefit from the HDB Build-to-Order (BTO), a subsidised flat.

In a recent refinement, beginning with the BTO exercise in June, a couple consisting of, for example, a national serviceman on full-time duty and a student on full-time study who are eligible for deferred assessment of income, will be required to pay a smaller initial down payment, of 2,5% of the purchase price, when signing an Agreement for Lease within nine months after booking a unit. The remainder of 17.5% of the purchase price will be paid at the time of collection of keys.

Housing Moves

Can housing be improved, along with other measures, to increase the TFR?

First, by allowing more young single adults to live alone they may have a better chance of finding a partner.

HDB may consider building homes for young single adults. These public housing flats can be leased at reasonable rates to local singles aged under 35.

Renting flats to young singles may include elements popularized by co-living operators. For example, sophisticated shared spaces that encourage mingling. You could, for example, include a modern gym, a fully equipped communal kitchen, a studio for arts and co-working areas.

Consider giving married couples under 30 years of age a higher priority in the selection of new HDB flats.

Recent changes have given married couples under 40 years of age a higher priority to secure a BTO apartment. They get, for example, an additional ballot when they apply for a flat.

Over the years, the median age for first marriages has generally increased. Age can influence the fertility of both men and women. Giving married couples under 30 years old priority for a BTO could lead to more marriages and more babies.

Third, you might want to consider housing incentives tied to the number children a couple has.

Buyers of HDB new homes classified as Prime or Plus will have to return a portion of their sale proceeds to the HDB when they decide to sell, since these flats are built in prime locations and receive higher subsidies.

A local couple with 2 kids may be able to get back a portion of the money they spent on their BTO unit. Paybacks can be higher for couples with more than three children.

Four, you can build HDB flats that are bigger than the new five-room units. These may be as large as 1,200 square feet.

Build HDB jumbo apartments with four or more bedrooms, each measuring around 1,500 square feet. Local families with at least three children can purchase these HDB jumbo apartments. A larger home is ideal for a family with multiple children.

The HDB can resell these jumbo apartments directly based on the current market value.

Fifth, give concessions on the home loan repayments for local couples with children. Reduce the financial burden associated with servicing a multi-year mortgage. This can reduce the financial strain of having children.

This will allow couples with children to be more flexible in their roles, if necessary, and free up more time to spend on childrearing. Many parents value more time spent with their children in the early years.

Sixth, assist local couples who earn more than the maximum monthly income for BTOs and executive condominiums (EC) to afford a private home. The maximum income for a BTO purchase is S$14,000 while the maximum for new EC purchasers is S$16,000.

A concession that could be made is to waive the Buyer’s Stamp Duty for young couples in Singapore who purchase their first private residence. Couples may value the nearly S$70,000 they save in BSD when buying a S$2,000,000 home.

The idea of helping local high-earning couples to own a home could encourage young people with careers and family plans to accelerate their marriages and parenting plans.

A heavy price to pay

These suggestions may not be exhaustive or radical enough.

Financially, additional housing assistance for young locals will also be costly. HDB has a significant deficit in its Home Ownership Programme. Government expenditures may also increase to meet the growing healthcare demands.

Couples’ decisions to have children are influenced by factors like the education system, workplace practices, and perceptions of social mobility.

Respect for the individual’s choice to be childless or single. Some people prefer to be single or can’t find the right partner. Some people dislike children or think that adding more humans to the population is harmful to the environment.

However, increasing TFR is important to ensure Singapore’s economy stays dynamic in the long term. A successful economy is essential for the collection of taxes that will help to pay for healthcare and social spending.

Parents invest a great deal in raising their children. The society as a whole may have to pay more to ensure that Singaporeans have many children.

There are many countries in the wealthy world that also face a serious fertility issue. Singapore can still be exceptional by finding creative solutions to the fertility problem.

Let’s make more progress in housing, and other areas to prepare for the future when many young Singaporeans will have large families.

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