In modern society, there is typically an emphasis on "building a career before starting a family"—securing stable employment and income before considering marriage. However, in response to declining birth rates, the Singapore government is experimenting with a new strategy that seems to encourage "starting a family before building a career."

Minister for National Development Lawrence Wong announced that starting from June 2024, young couples who are serving national service, studying full-time, or have recently graduated will only need to pay 2.5% of the purchase price as a down payment when buying Build-To-Order (BTO) flats. This new policy halves the current 5% down payment requirement.

Under the new policy, eligible young couples can enjoy two benefits: a low 2.5% down payment and deferred income assessment. Specific conditions include:

- Both individuals are full-time students or full-time national servicemen, or were such within the year before applying for the Housing Eligibility (HFE) letter.

- One applicant must be 30 years old or younger.

- The young couple must be married or applying under the Fiancé/Fiancée Scheme and both individuals must be at least 21 years old.

Young couples meeting these criteria can apply for new flats, with the option to delay income assessment until just before collecting their keys.

This policy effectively reduces the home purchase barrier for young Singaporeans. Previously, to qualify for up to SGD 80,000 in Additional CPF Housing Grant (AHG), one party had to have been continuously employed for at least 12 months. Young couples just entering the workforce often cannot meet this requirement and thus miss out on the additional grant. Moreover, those who have not yet worked or have just entered the workforce may struggle to secure higher loan amounts.

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By allowing income assessment to be deferred, young couples are more likely to qualify for the AHG and higher loan amounts. Eligible couples can also opt for the Staggered Downpayment Scheme, paying the down payment in two installments. Starting from June this year, whether applying for a loan from HDB or a bank, only 2.5% of the purchase price needs to be paid upon signing the agreement, with the remainder paid upon key collection. Those taking loans from HDB must pay 17.5% of the purchase price, while bank loan applicants must pay 25%.

Reducing the down payment percentage helps alleviate the financial burden on young couples, allowing them to secure a home with a smaller initial outlay while they establish their careers. According to official figures, from May 2018 to the end of 2023, over 3,700 young couples have benefited from these measures.

Lowering the down payment from 5% to 2.5% aims to address two major hurdles young people face in purchasing homes: insufficient funds and unstable incomes. This move undoubtedly encourages Singaporeans to marry earlier, thereby potentially boosting birth rates. Data shows that the median age for first marriages in Singapore in 2022 was 30.7 years for men and 29.3 years for women, up from 30.1 and 28 years respectively in 2012, reflecting a trend towards later marriages.

By allowing young couples to purchase homes with only a 2.5% down payment, the Singapore government is effectively promoting the concept of "starting a family before building a career." However, while reducing the down payment, it also means that the amount to be paid later will increase. With inflationary factors, the prices of pre-purchased flats may increase year by year, so young couples can buy early and enjoy early.

However, there are concerns that young people who are studying or serving may not be able to think carefully and may not make wise decisions on two major life events, marriage and buying a house. If the relationship breaks down, it may lead to a waste of the down payment. According to data from the Singapore Statistics Bureau, the divorce rate for local men and women aged 20 to 24 is the highest among all age groups, at 17 per 1,000 and 22.3 per 1,000 respectively.

However, official data shows that from 2012 to 2022, only 79 couples were unable to provide a marriage certificate within six months of buying a flat, with most cases delayed due to the epidemic. Therefore, the situation where the purchase of a house fails due to emotional issues is not serious.

With the implementation of the new policy, the government will continue to track data to observe whether reducing the down payment will result in greater pressure on young couples to cope with mortgage payments. Through these measures, the Singapore government hopes to lower the threshold for young people to buy homes, encourage them to marry early, and thereby boost birth rates.