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Here’s The Salary You Need To Earn To Afford These Homes In Singapore [2024 Edition]

You need to earn at least between $2,439 and $4,882 per spouse to afford the different HDB flat types.

With the overall property market in Singapore continuing to remain strong in 2023, many of us who are still looking to have a roof over our heads may be wondering whether we could still afford that dream home that we are coveting.

Though we should be looking holistically when deciding on the affordability of the home we intend to purchase, for this article, we focus on the minimum salary needed to finance our mortgage payments.

Here’s how much you need to earn to at least afford the different types of residential properties in Singapore.

Getting The Assumptions For Our Calculations Out Of The Way:

Before we delve into the assumptions, we remind readers that the figures presented are an approximation. We urge readers to do their own sums before committing to a property purchase.

Our Assumptions:

  • We did not factor in any housing grants that are available for first-time buyers of HDB flats.
  • We are taking the minimum downpayment required for the purchase of the residential property, regardless of the loan eligibility and financial capacity of the borrowers.
  • Based on the HDB cooling measures introduced on 30 September 2022, the loan-to-value for HDB loans is 80%. Therefore, the downpayment for HDB flats is calculated based on a 20% downpayment.
  • In contrast, the downpayment for Executive Condominiums (EC) and private properties is 25%, as HDB loans are not applicable.
  • We assume the borrowers have no other loans other than the property loan they intend to take. Hence, they could maximise the Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR).
  • The MSR rate of 30% is used to determine the salary required for HDB flats.
  • A TDSR rate of 55% is used to determine the salary required for executive condominiums (where the minimum occupation period has been fulfilled) and private properties.
  • We also assume a 25-year home loan tenure with an interest rate of 2.6% for HDB flats and 3.5% for EC flats and private properties to determine the monthly repayments.
  • For the salary required, we assume that both husband and wife are working and earning the same salary.
  • Lastly, we did not take any other miscellaneous costs into consideration, including agent fees, stamp duty, legal fees, renovation or other related expenses that are typically incurred for a property purchase.

The Salary We Need To Buy Our Dream Home

Housing Type Average Resale Housing Price Minimum Downpayment Monthly Repayments Household Income Average Salary Per Spouse
HDB 3-Room $403,000 $80,600 $1,463 $4,877 $2,439
HDB 4-Room $610,000 $122,000 $2,214 $7,380 $3,690
HDB 5-Room $710,000 $142,000 $2,577 $8,590 $4,295
HDB Executive $807,000 $161,400 $2,929 $9,763 $4,882
Executive Condominiums (ECs) $1,340,000 $335,000 $5,031 $9,147 $4,574
Condominiums (OCR) $1,438,000 $359,500 $5,399 $9,816 $4,908
Condominiums (RCR) $1,886,000 $471,500 $7,081 $12,875 $6,438
Condominiums (CCR) $2,656,000 $664,000 $9,972 $18,131 $9,066
Terrace House $3,748,000* $937,000 $14,072 $25,586 $12,793
Semi Detached House $6,158,000* $1,539,500 $23,121 $42,038 $21,019
Bungalow $10,036,000* $2,509,000 $37,681 $68,511 $34,256
Good Class Bungalow (GCB) $29,269,000# $7,317,250 $109,895 $199,810 $99,905


(*) Figures are based Squarefoot Research’s last 6 months transactions from Aug 23 to Jan 24.
(#) The figure is based on URA transactions from Jan 24 to Dec 23 for landed properties sized above 1,400 sqm.

HDB Flats

The HBD Resale Price Index reached a new high of 180.4 in 2023, translating to an overall price increase of about 4.9% for the year. Nevertheless, this is around half of the 10.4% increase in 2022, indicating some moderation in the pace of price growth.

Source: HBD Resale Price Index

Breaking down the individual flat types, the median HDB resale prices, according to the HDB 4Q2023 Resale Statistics, have increased by between $15,500 and $38,500 in 2023. The highest rate of increase was recorded for the 4-room resale types, which grew by around 7%. In contrast, the 5-room flat types, which were in high demand in 2022, had the smallest price gain of around 2.6% in 2023.

Housing Type Median Housing Price 2023 Median Housing Price 2022 Price Difference (%)
HDB 3-Room $395,500 $380,000 $15,500 (4.1%)
HDB 4-Room $575,000 $536,500 $38,500 (7.2%)
HDB 5-Room $663,000 $646,500 $16,500 (2.6%)
HDB Executive $816,000 $780,000 $36,000 (4.6%)

For flat buyers, the salary needed to finance the mortgage payments of these HDB flats (before any housing grants) ranges between at least $2,439 and $4,882 per spouse. By and large, this range is well within the 2023 MOM’s median gross monthly income of $5,197, indicating that the average Singaporean is able to afford an HDB flat. Furthermore, eligible first-timer homebuyers are also given generous housing grants, which may help with the affordability of HDB flats.

Read Also: 5 Cheapest HDB Estates For 2024

Executive Condominiums

First introduced in 1996, executive condominiums (ECs) have recently become a popular choice among new home buyers and upgraders seeking better living standards. This strong demand has pushed the median unit price for new ECs by around 5.4%, or to a high of $1,409 per square foot (psf) in 2023. In contrast, the median unit price of resale ECs has grown by 10.1%, or to a high of $1,257 per square foot (psf) in 2023.

Based on the URA transactions for 2023, the average cost of a resale EC unit is $1,340,000. Buyers would require a monthly household income of at least $9,147 per month or $4,574 per spouse. While this amount is well below the income ceiling of $16,000 for new ECs, prospective buyers should also consider other running costs, such as property tax and maintenance fees, which would add to the financing costs.

The reason why the salary required per spouse to finance a resale EC may seem to be lower than a resale Executive flat is due to the different loan threshold limits used by financial institutions. For HDB flats and ECs bought first-hand from the developers, buyers are subjected to the MSR (30%) limit. On the other hand, for resale ECs that have completed their 5-year minimum occupation period (MOP), buyers would be subjected to the TDSR (55%) limit. This allows them to use a larger portion of their income to finance the mortgage payments.

Read Also: Complete First-Timers’ Guide To Buying A New Executive Condominium (EC) In Singapore

Private Condominiums

Similar to the resale HDB market, private (non-landed) residential properties experienced another year of strong growth. The URA Private Property Index reached a new high of 201.5, increasing by 6.8% in 2023, though this is slightly less than the 8.6% increase in 2022.

Source: URA Private Property Price Index

The private condominium market is segmented based on three regions: the Core Central Region (CCR), the Rest of Central Region (RCR), and the Outside Central Region (OCR).

Based on SquareFoot Research’s past 6-month transactions, the median unit price for a private residential unit in the OCR region is $1,371 psf. To finance a private property in the OCR, which costs an average of $1,438,000, a household income of at least $9,816 or $4,908 per spouse is required.

Similarly, the median unit price for a private residential unit in the RCR region is $1,675 psf. A household income of at least $12,875 or $6,438 per spouse is required to finance a condominium in the RCR, which costs an average of $1,886,000.

The condominiums in premium locations in the CCR cost an average of $2,656,000 and have a median unit price of $1,941 psf. A household income of at least $18,131 or $9,066 is required to finance the mortgage payments.

Aside from the minimum salary required to finance a private property, it’s worth noting the downpayment of between $360,000 and $665,000 that buyers would be required to place either in cash or CPF. This is around 3 to 8 times the minimum downpayment required for HDB flats.

Read Also: CCR, RCR, OCR: What Do These District Classifications Mean When Looking For Your Property Purchase

Landed Properties

Landed properties, which consist of around 4.8% of the total residential housing stock, are classified as terrace units, semi-detached units, and detached units (also referred to as bungalows).

Based on Squarefoot Research’s last 6 months of transaction records, the terrace units, which can be considered entry-level landed properties, cost an average of $3,748,000 with a median unit price of $1,783 psf. To afford a property at this price point that has a median size of around 1,963 sq ft, a monthly household income of at least $25,586 or $12,793 per spouse is required. At this level, it is still within the 2023 MOM Average Monthly Household Income for landed properties of $28,169.

However, to own a semi-detached unit with a median unit price of $1,577 psf and an average cost of $6,158,000, the household income must be at least $42,038 or $21,019 per spouse. Typically, semi-detached units are bigger than terrace units, with a median size of around 3,627 sq ft.

Lastly, detached units (also known as bungalows) are generally the biggest among the three types of landed properties, with a median size of around 5,430 sq ft. They cost an average of $10,036,000, or a median unit price of around $1,623 psf. To finance the mortgage payments at this price point, a household income of at least $68,511 or $34,256 per spouse is needed.

In reality, buyers would need to earn slightly more to account for the higher cost of maintenance and running fees for landed properties. Furthermore, with the minimum downpayment of between $940,000 and $2,500,000, buyers would need sizeable cash and/or CPF savings in order to afford these properties.

Read Also: Complete Guide To Buying Landed Property In Singapore

Good Class Bungalows (GCBs)

Lastly, for the crown jewel of residential properties in Singapore, Good Class Bungalows (GCBs), the average price was derived based on URA transaction records for landed properties sized above 1,400 sq m (or 15,000 sq ft).

There were a total of 15 transactions meeting the requirement in 2023, with the lowest transaction recorded at around $16 million for a unit at Palm Road. In contrast, the highest transaction was recorded at Dyson Road/Chancery Hill Road for around $61 million.

In addition to placing a deposit of around $7.3 million, a monthly household income of around $200,000 or $100,000 per spouse is needed to afford a GCB in Singapore. In reality, the average GCB homeowner might be earning at least 10 to 15 times the minimum salary required, given the high running costs of maintaining such properties.

Read Also: 4 Reasons Why A Good Class Bungalow (Assuming You Can Afford It) Is A Great Investment

Stay Prudent When Purchasing Your Home

In a buoyant property market, we may perceive that housing affordability is worsening, which might prevent us from taking action to purchase our dream home. Therefore, this theoretical exercise was meant to serve as a reference for acquiring the different types of properties in Singapore, including the minimum salary needed to finance the mortgage payments.

It’s important to highlight that the assumptions for these calculations were based on using the maximum leverage to finance our home mortgage payments. In reality, we may have other loan obligations, and banks might use a higher stress-test interest rate that may restrict our borrowing limits. Furthermore, we should also factor in recurring property-related costs, such as maintenance fees and property taxes, that might affect our overall ability to finance the property.

Read Also: 3-3-5 Rule Of Buying An HDB Flat: How Much Can Singaporeans Really Afford?  

As such, it’s always better to stay prudent when purchasing our home by having a bigger buffer to stomach any short-term volatility that may arise due to job loss or unexpected emergencies. For those of us who need assistance in finding the best rates to finance our property purchase, having a good, trusted broker like our friends at Redbrick could not only give us a piece of mind but also allow us to enjoy unparalleled service.

The best part? The service is free since brokers like them receive their commissions from the banks. Whether you want the best loan rate or just someone to walk you through the process, feel free to get a non-obligatory quote and consultation.

How Much You  Need  To Afford Homes 2024

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