Public housing flats, or HDB flats, account for 78% of all residential dwelling types in Singapore. They can be bought directly from HDB, which sells them as Build-to-Order (BTO) flats or on the secondary market from other homeowners as resale flats.
Between these two types, BTO flats are priced cheaper than comparable resale flats nearby due to the market discount applied to make them affordable for eligible flat buyers. On top of it, eligible buyers also receive CPF housing grants to help with their flat purchase.
This makes it more affordable for first-time buyers to get a foot in the Singapore property market, which has seen strong growth in the last few years. We recently did some math and found that the average monthly household income needed to buy a 3- to 5-room resale HDB flat is between $4,700 and $8,400.
In this article, we take a look at how much a couple would need to earn to afford the different BTO flat types after accounting for government subsidies.
Read Also: 5 HDB BTO Application Tips For Young Singaporean Couples To Get Their Homes
Assumptions For Our Calculations
The following calculation is only meant as a guide and would differ depending on our individual circumstances. Do speak to a trusted agent or home loan broker before committing to a home purchase and loan. Assumptions used in the calculations:
- We do not have any other loans (for the sake of Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio calculations (MSR))
- We do not need to think about other financial commitments, so that our full salary can be committed towards our housing purchase
- We have enough money for the downpayment: 20% for HDB flats
- We are taking a 25-year home loan tenure.
- Interest rate for our home loan is 2.6% for HDB flats. Mortgage payments are calculated using CPF’s Mortgage Calculator
- We meet the eligibility criteria for the maximum government grants for our income
- For the salary required, we assume that both husband and wife are working and earning the same salary
- We do not take any other costs into consideration, including Stamp Duty, lawyer fees, renovation or other expenses
The BTO flat prices used are an average of the February 2022 and November 2021 launch prices (excluding short-lease launches). These prices may differ from the prices on the HDB Flat Portal as well as future BTO launch prices.
The Salary We Need To Afford Buying A BTO Flat (By Different Flat Size)
As the BTO flat prices are differentiated by whether they are located in mature or non-mature estates, we have also separated the types accordingly.
| Average Housing Price ($) | Minimum Downpayment ($) | Outstanding Payment ($) | Monthly Repayment ($) | Household Income ($) | Salary Per Spouse ($) | |
| Non-Mature | ||||||
| 2-Room Flexi (Type 1) | 111,625 | 22,325 | 89,300 | 405 | 1,350 | 675 |
| 2-Room Flexi (Type 2) | 141,875 | 28,375 | 113,500 | 515 | 1,716 | 858 |
| 3-Room | 228,125 | 45,625 | 182,500 | 828 | 2,760 | 1,380 |
| 4-Room | 329,100 | 65,820 | 263,280 | 1,194 | 3,980 | 1,990 |
| 5-Room | 452,500 | 90,500 | 362,000 | 1,642 | 5,474 | 2,737 |
| Mature | ||||||
| 2-Room Flexi (Type 1) | 225,000 | 45,000 | 180,000 | 817 | 2,724 | 1,362 |
| 2-Room Flexi (Type 2) | 287,500 | 57,500 | 230,000 | 1,043 | 3,477 | 1,738.50 |
| 3-Room | 415,000 | 83,000 | 332,000 | 1,506 | 5,020 | 2,510 |
| 4-Room | 596,500 | 119,300 | 477,200 | 2,165 | 7,217 | 3,608.50 |
These are the salaries needed to purchase a subsidised BTO flat directly from HDB, without accounting for the additional housing grant.
The Salary We Need To Afford Buying A BTO Flat (By Different Flat Size) With Enhanced CPF Housing Grant (EHG)
First-time BTO buyers can apply for the Enhanced CPF Housing Grant (EHG) to help with their purchase of the new flat. The amount of subsidy is determined based on the average household monthly income over the past 12-month period, which can add up to $80,000 for eligible first-time families and up to $40,000 for eligible first-time singles.
Homebuyers can use the grant to either offset the purchase price of the flat or reduce their mortgage loan, but they cannot use it for the minimum cash downpayment (if any) or for monthly mortgage instalment payments.
Note: Applicants of an HDB concessionary loan are allowed to fully pay for their downpayment using their CPF savings. In other words, if you’re taking an HDB loan, you could use the EHG to fully meet your downpayment requirements.
For the purposes of our calculations, we assume full use of the EHG to offset the purchase price instead of using it to pay for a portion of the downpayment.
| Average Housing Price ($) |
EHG ($) |
Price After EHG ($) |
Minimum Downpayment ($) | Outstanding Payment ($) |
Monthly Repayment ($) |
Household Income ($) | Salary Per Spouse ($) | |
| Non-Mature | ||||||||
| 2-Room Flexi (Type 1) | 111,625 | 80,000 | 31,625 | 6,325 | 25,300 | 115 | 384 | 192 |
| 2-Room Flexi (Type 2) | 141,875 | 80,000 | 61,875 | 12,375 | 49,500 | 225 | 750 | 375 |
| 3-Room | 228,125 | 75,000 | 153,125 | 30,625 | 122,500 | 556 | 1,854 | 927 |
| 4-Room | 329,100 | 60,000 | 269,100 | 53,820 | 215,280 | 977 | 3,257 | 1,628.50 |
| 5-Room | 452,500 | 45,000 | 407,500 | 81,500 | 326,000 | 1,479 | 4,930 | 2,465 |
| Mature | ||||||||
| 2-Room Flexi (Type 1) | 225,000 | 75,000 | 150,000 | 30,000 | 120,000 | 544 | 1,814 | 907 |
| 2-Room Flexi (Type 2) | 287,500 | 65,000 | 222,500 | 44,500 | 178,000 | 808 | 2,694 | 1,347 |
| 3-Room | 415,000 | 50,000 | 365,000 | 73,000 | 292,000 | 1,325 | 4,417 | 2,208.50 |
| 4-Room | 596,500 | 25,000 | 571,500 | 114,300 | 457,200 | 2,074 | 6,914 | 3,457 |
As seen in the tables above, the Enhanced CPF Housing Grant (EHG) can make a substantial difference in the prices of BTO flats, especially for the smaller sized flats and the minimum salaries required to afford them.
Based on the maximum EHG of $80,000, an average 2-room flexi (Type 1) flat—the cheapest available type of housing—in a non-mature estate, would cost $31,625. It can be purchased with an average income of $192 per spouse or a household monthly income of $384.
On the other hand, the most expensive type of unit in our list, a 4-room BTO flat in a mature town, would cost an average of $571,500 after subsidies and require an average income of at least $3,457 per spouse or a household monthly income of $6,914. At this income level, the household will only be eligible to receive up to $25,000 in EHG instead of the full $80,000.
Read Also: Here’s What Happens When You Give Up Your HDB BTO Queue Number
Buy Within Your Means Based On Your Needs
While the EHG is meant to help first-time homebuyers, it may also encourage some to purchase beyond their means. This could be buying large flat types (i.e, 5-room), when their household size is small, or considering mature estates, which might be out of their budget if not for the EHG to help with their downpayment.
One way to be more prudent is to exclude the EHG from our considerations and instead focus only on our housing needs and affordability level when selecting our BTO. This way, the EHG will complement our ability to finance the property rather than stretch our finances.
Read Also: Why HDB Resale Flats Can Be Affordable If We Choose To Purchase Within Our Means
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