[In-Depth Look] Let's Build Newlywed Hope Town Filled with Hope

Jin Mi-yoon, Senior Research Fellow at LH Land and Housing Institute

[Asia Economy] Singapore’s Punggol New Town is known as the so-called ‘Baby Town.’ While children aged 4 and under make up 3.3% of Singapore’s population, in Punggol they account for 12%. This is due to the presence of over 60 childcare centers, more than 70 playgrounds, a children’s library, and family-friendly shopping areas within a 5-minute walk, attracting young dual-income working moms and moms with kids.

Singapore’s low birthrate issue emerged in the 1980s. In response, the government implemented childbirth incentives such as baby bonuses and child savings allowances. By the 2000s, the focus shifted to creating a ‘family-friendly environment for child-rearing.’ The ‘Punggol 21 Plus’ plan, launched in 2010, is akin to a youth housing special zone that considers the preferences and housing cost burdens of young households. Over 80% of the housing is public housing. Residents must live there for at least five years, and when selling, they must sell to the Housing & Development Board (HDB) and pay a portion of the capital gains. However, the perception is that the benefits of affordable prices and a child-friendly environment far outweigh these conditions.

In South Korea, the ‘Newlywed Hope Town’ model was introduced in 2018. Its goal is to alleviate housing concerns for young people about to marry and newlywed couples with children. It is also a housing alternative aimed at changing social perceptions that avoid marriage and childbirth and improving quality of life. Like Punggol, Newlywed Hope Town aims to provide a ‘child-friendly environment conducive to raising children.’ Its biggest advantage is a sale price 20-30% lower than market prices. The exclusive mortgage loan for Newlywed Hope Town offers a fixed interest rate (1.3%) for up to 30 years. There are obligations in return for government support: residents must live there for five years, and resale is prohibited for ten years. If government-backed loans are used, when selling the house, 10-50% of the capital gains?depending on loan period, amount, and number of children?must be paid to the government.

However, evaluations of Newlywed Hope Town are mixed. It is positively viewed as a new discovery of public housing specialized for newlyweds, advancing the timing of first home purchases and lowering loan barriers through exclusive loan channels. On the other hand, complaints about small unit sizes and resistance to the shared equity mortgage have been significant enough to overshadow expectations and goodwill. That said, with medium-sized units being supplied this year and considering recent tightening of loan regulations and rising interest rates, there is room to reassess Newlywed Hope Town. Even if part of the capital gains must be returned, considering the loan interest benefits, the shared equity mortgage could actually highlight more advantages.

South Korea’s population has been declining since 2020. The proportion of children aged 4 and under among the total population decreased from 4.6% in 2010 to 3.4% in 2020, and is expected to fall to 2.6% by 2030. Hearing children’s cries and seeing strollers on the streets have become rare. Of course, Newlywed Hope Town cannot solve all problems. Continuous evolution and improvement are necessary. Unit sizes must respond to consumer demands, and investment scale should increase to further lower loan barriers and burdens. The shared equity structure should be reorganized based on residency period rather than number of children. If hope can repeatedly sprout in Newlywed Hope Town, what could be a more valuable low birthrate policy?

Jin Miyun, Senior Research Fellow, LH Land and Housing Institute

This content was produced with the assistance of AI translation services.