From a property perspective, many good reasons to marry young

SINGAPORE needs more babies as population growth helps to grow and create a vibrant economy.

To help support parenthood, Prime Minister Lawrence Wong announced at the National Day Rally in August that, among other measures, employers will be mandated to double paternity leave from two weeks to four weeks from Apr 1, 2025, and parents of newborn babies will soon get 10 weeks of additional shared government-funded leave.  

PM Wong, who is also finance minister, added that he hoped to share some good news in next year’s Budget in February on providing more support for parents thinking about having a third child, as well as those with three or more young children.

Having more Singapore residents marry at a younger age can be a precursor to higher birth rates.

In 2023, among Singapore residents, the proportion of married males in their 20s was 8.9 per cent versus 13.5 per cent in 2010 and 20.6 per cent in 2000. The proportion of married female residents was 17 per cent, 27.1 per cent and 40.2 per cent in 2023, 2010 and 2000, respectively.

Among residents in their 30s, the proportion of married males was 63.8 per cent, 69.1 per cent and 72.8 per cent in 2023, 2010 and 2000, respectively, while that of married females was 70.1 per cent, 74.8 per cent and 79.3 per cent respectively.

In Singapore, the median age at first marriage for grooms and brides were 31 years and 29.5 years, respectively, in 2023, versus 30.2 years for grooms and 28.1 years for brides in 2013, depicting the trend towards later marriages.

Can more Singaporeans be encouraged to marry at a younger age? From a property perspective, there are good reasons to marry young. 

First, a young single adult seeking to live independently may need to rent a home. A single Singapore citizen must be at least 35 years old before he can buy a new Housing and Development Board (HDB) two-room flexi flat or various flat types excluding 3Gen flats in the resale market.

While living in a well-designed, centrally-located co-living space with good amenities can be fun, paying rent is a pure expense. On the other hand, money spent on servicing a housing loan helps in buying an asset that can appreciate in value.

Entry point

Second, the cost-effective routes to homeownership here are to buy a Build-To-Order HDB flat or a new executive condominium (EC) home. Among others, a local couple buying a BTO or a new EC home needs to meet the monthly household income ceiling of S$14,000 and S$16,000, respectively.

Income might rise quickly between the ages of 20-plus to 40-plus. Marrying later could mean a couple busts the income ceiling to buy a BTO unit or a new EC home.

Among degree holders, the median monthly gross income from work excluding employer Central Provident Fund contributions of full-time employed residents excluding full-time national servicemen in 2023 were S$5,000, S$6,500, S$8,360 and S$9,870 for males in age groups of 25 to 29, 30 to 34, 35 to 39 and 40 to 44, respectively. The corresponding figures among female degree holders were S$4,667, S$5,850, S$6,900 and S$7,583, respectively.  

BTO flats are sold at subsidised prices. A four-room BTO unit could cost 30 to 40 per cent less than a comparable resale unit nearby with shorter remaining land lease. Moreover, an eligible young first-time homebuyer can receive higher housing grants for new or resale HDB homes when their income is lower, versus a peer who buys a home when they are older and earning more.

The EC is a hybrid of public and private housing. Built and sold by private developers, ECs typically sit on 99-year leasehold land and offer condominium features. After 10 years, the EC unit can be sold to anyone – including foreigners – just like a private condominium. A new EC home could cost 25 per cent less than a comparable new condominium unit.

Recycling gains

Third, money made from selling a BTO or new EC property can be used to build more wealth via homeownership through buying a higher-value home.

Starting from the upcoming October BTO exercise, HDB will classify projects by Standard, Plus and Prime. Prime flats are in the most prime central locations, such as the Greater Southern Waterfront. Plus flats will in choice locations within each region and developed estates. A BTO unit that is classified as Plus or Prime will come with a 10-year Minimum Occupation Period (MOP), compared with five years for a Standard flat. 

Individuals with no outstanding housing loan, who take a home loan from a financial institution, are subject to the loan-to-value limit (LTV) of 75 per cent. However, among others, a lower LTV applies if the loan period extends beyond the borrower’s age of 65 years.

In short, a couple’s borrowing capacity to buy a private home can be affected by their reaching the MOP for a BTO unit when they are older.

Fourth, a couple who become homeowners when young may attain financial freedom earlier. 

All else being equal, a couple who married in their 20s and bought a home with a 25-year housing loan will become mortgage free at an earlier age versus a couple who took up such a loan when they married in their late 30s. Thus, the couple who married in their 20s may have greater leeway to retire when they reach just over 50 years old, knowing they own a fully paid-up home.

Moreover, many young couples might benefit from being forced to be more prudent in their discretionary spending because they need to service a housing loan.

People may be marrying later in life due to spending longer in higher education or focusing on building careers. Also, finding a suitable life partner cannot be rushed. A divorce might mean a messy and costly splitting of assets, including a home.

Nonetheless, young Singaporeans would be wise to focus their hearts and minds on getting married soon. After all, one likely builds greater wealth from homeownership by starting young.