HDB eases income rules for young couples buying BTO flats

[SINGAPORE] The Housing Board will ease how it examines young couples' incomes when they buy a Build-To-Order (BTO) flat, making it easier for individuals who are still studying or have recently begun working to purchase their desired units.

Couples can choose to delay their income assessment for a housing loan until right before they take the keys to their flat starting with the next BTO exercise in July, as long as one partner is a full-time student or a national serviceman. This practically means that couples would be eligible for a larger loan amount because they would have been working for some time by then.

The policy adjustment comes amid growing concerns about housing affordability, particularly for young Singaporeans who face rising living costs and competitive job markets. By allowing income assessments closer to key collection, the government aims to provide more flexibility for couples who may not yet have stable earnings but anticipate career progression in the coming years.

Desmond Lee, the National Development Minister, made the announcement on March 26 during a public housing engagement event at the National University of Singapore. Mr Lee also stated that the authorities are increasing the supply of BTO flats, with waiting times of less than three years. From 2025 to 2027, around 12,000 such flats will be launched, which is more than HDB has produced in the previous five years. They will be among the more than 50,000 flats that the government plans to build over that time.

The increased supply of shorter-waiting-time flats is part of a broader strategy to address long-standing complaints about construction delays, which were exacerbated by pandemic-related disruptions. Analysts say the move could ease immediate housing demand while ensuring that future supply remains responsive to demographic shifts, such as young families’ preferences for quicker move-in options.

Mr Lee stated that modifying the deferred income assessment criterion would allow couples to settle down early and purchase a four- or five-room flat if they intend to have children. To be eligible for deferred income assessment prior to this modification, both parties had to be full-time students or national servicemen, or have finished their studies or national service within the 12 months before applying for a HDB flat eligibility letter. At least one of them must be 30 or younger.

Industry experts have welcomed the expanded eligibility, noting that it aligns with Singapore’s broader push to support family formation and homeownership among younger demographics. However, some caution that while deferred assessments may ease initial financial burdens, couples should still plan carefully to ensure long-term affordability, especially with potential interest rate fluctuations.

“Each young couple’s life journey is different. Regardless of which path you take, if you are looking to settle down early... we hope to support you in achieving your housing aspirations,” Mr Lee told NUS students.

Mr Lee used the example of a couple with a monthly household income of $3,500 to demonstrate how the deferred income assessment would assist applicants in purchasing larger flats. Previously, their budget allowed them to purchase a three-room BTO flat in Yishun. “However, the three-room flat might be small if they plan to have many children,” he said.

Under the extended policy, the couple can apply for a BTO property first, and their HDB housing loan and Enhanced Central Provident Fund Housing Grant evaluation would be deferred for three years, closer to the key collection date.

“At that point, both parties would have started working. With a combined income of, say, $7,500, they will qualify for a sufficient loan to buy a four- or five-room BTO flat,” Mr Lee said.

The minister’s example highlights how the policy could empower couples to make more ambitious housing choices early in their careers. This shift may also encourage more young Singaporeans to consider larger family units, aligning with national efforts to boost birth rates and strengthen social stability through homeownership.

He noted that the initiative will also benefit couples who believe a three-room flat is adequate but prefer to buy a home closer to the city core and services, which is typically more expensive. The initial down payment required would be 2.5% of the flat price. Mr Lee stated that the scheme's expansion will help a diverse group of young couples, including university, polytechnic, and Institute of Technical Education graduates.

Mr Lee also addressed issues regarding BTO apartment availability and wait times during his speech. The authorities are on course to exceed their initial goal to build 100,000 new units between 2021 and 2025, he said. The median waiting time for BTO flats has been shortened to less than four years, comparable with pre-pandemic waiting times, he added.

Mr Lee also acknowledged calls to lower the minimum age for singles to buy BTO and resale flats, currently set at 35. This is something that the authorities are reviewing, even though they are “not quite ready to do so”, he said.

While the focus remains on supporting young families, the minister’s remarks signal that the government is attuned to the housing needs of singles, a demographic that has grown in both size and influence. Advocacy groups have long argued that lowering the age threshold could reduce reliance on the private rental market and provide more equitable access to public housing.

He pointed out that singles have been permitted to apply for two-room flexi flats in all areas since October 2024. From mid-2025, singles will have priority access when purchasing a property near or with their parents through the Family Care Scheme.

Turning to housing affordability, Mr Lee acknowledged students' concerns after hearing about resale flats selling for more over $1 million. “I want to assure you that there is a wide range of affordable housing for different housing budgets,” he said.

The new flat categorization system, which divides BTO projects into Standard, Plus, and Prime categories based on their proximity to the city center, transportation links, and amenities, is intended to reduce the "lottery effect" of owning flats in prime and central locations, according to Mr Lee. Plus and Prime flats will have tighter resale terms, such as a 10-year minimum occupation time and subsidy clawback. Mr Lee also mentioned that they have additional subsidies on top of the existing BTO subsidies to keep them affordable for first-time buyers.

Jane Doe, a fourth-year business student, noted that with the improved circumstances for the deferred income assessment, she would consider applying for a four-bedroom Prime or Plus property with her partner, who started working full-time a year ago. A four-room flat in those categories is currently out of reach, with prices often exceeding $500,000, according to the 23-year-old.

"I wanted a flat in Bayshore, but I was worried we wouldn't be able to afford it," she said, adding that she was confident they would qualify for a larger housing loan once she started working.