Govt unveils $2b package to reverse low birth rate

Being a parent in Singapore has never looked so attractive.

Married couples, with children under the age of 16, buying HDB flats for the first time will get priority allocation of new flats. Meanwhile, fathers will get paid paternity leave of one week in addition to the one-week leave they can co-share with their spouses.

These were some of the measures announced by the government yesterday as part of a bumper $2 billion Marriage and Parenthood package that it hopes will reverse the low birth rate here. As a side-effect, some see it helping to moderate prices in the HDB resale market and stabilising the HDB rental market.

The initiatives, announced by Deputy Prime Minister Teo Chee Hean, focused on five key areas - making it faster and easier to get housing to support early marriages and births; support for medical costs related to conception and delivery; further defraying child-raising costs; enhancing work-life measures and to signal to fathers to play a bigger role in bringing up their children.

On housing, the package introduced the Parenthood Priority Scheme by the HDB, to give priority allocation of HDB flats to first-timer married couples with children as it will set aside 30 per cent of Build-to-Order (BTO) flats and 50 per cent of Sale of Balance Flats (SBF) from the January 2013 HDB Sales Exercise.

In addition, the package also introduced another initiative to meet the housing needs of married couples in the form of the Parenthood Provisional Housing Scheme (PPHS), which will allow first-timer married couples with children to rent a flat from HDB while they await the completion of their new HDB flat. To do this, HDB will be launching about 1,150 units of three-room to five-room PPHS flats, with monthly rentals of between $800 and $1,900, in Ang Mo Kio, Bedok, Jurong West and Queenstown at the end of January 2013.

These measures could also have an effect on the HDB resale and rental markets. "The PPS will give first-timer married couples with children a higher success rate at the BTO and SBF flats. As this group has urgent housing needs, many of them have been turning to the resale market," explained Eugene Lim, key executive officer at ERA Realty.

He added that with lessened demand, resale market prices should continue to moderate, setting the stage for a long-overdue price correction while the PPHS initiative will also have a stabilising effect on the HDB rental market. The monthly rental range for PPHS flats is much lower than market rates for similar flats and so, by providing married couples with children the option to rent a flat from HDB, will take some pressure off the HDB rental market.

DPM Teo said a satisfactory outcome of this package would be if the TFR of Singapore could increase to about 1.4 or 1.5 over the next few years from 1.2 in 2011.

Source: Business Times –22 January 2013