How Much Do You Need To Earn To Afford A Private Property In Singapore?

How Much Do You Need To Earn To Afford A Private Property In Singapore?

Buying your first home is a major decision that should not be taken lightly, as it requires a lot of research and financial planning before committing to an initial down payment. For Singaporeans, this decision is made even more difficult due to the fact that Singapore is one of the priciest places in the world to purchase a property.

Your costs will further skyrocket if you’re considering buying a private property in Singapore. Private property prices have soared in the first half of 2018, before slowing down after the government unleashed several cooling measures.

Of course, private properties aren’t without its perks. While 80% of Singaporeans may live in public housing, private housing offers prospective buyers the option of landed or non-landed properties. Private condominiums also provide access to recreational facilities like swimming pools or gyms, while public housing HDBs lack these amenities. However, be prepared to pay about three times more for private properties, as private properly developers mostly cater to foreigners and high-income Singaporeans.

Having said that, it is not impossible to purchase private property in the island republic. All it takes is a little financial planning and foresight in order to figure out how much you really need to earn in order to afford a private home here. An important factor to take into consideration is total household income or the total combined salary of both you and your spouse (if joint mortgage).

Calculating your debt to income ratio

Once you have  calculated total household income, it is also important to determine your debt-to-income ratio or your capacity to manage monthly debt repayments. This is done by totalling up your monthly debt obligations and dividing this by your base salary. An individual earning a salary of S$4,800 per month (the average monthly salary in Singapore) who is paying S$1,500 for a home mortgage and an additional S$500 for a car loan would then have a debt-to-income (DTI) ratio of 41%.

Debt-to-income ratio

In recent years, the Singaporean government has also eased debt servicing requirements in the country, allowing buyers with debt-to-income ratios of 60% and above to take out mortgages on properties as long as the loans taken out do not exceed 50% of the overall property value.

Armed with this knowledge, and assuming that we stay within a debt-to-income ratio of 60%, we can now explore by region the average salary it takes to purchase a private property in Singapore. In calculating the figures, we’ll assume that the buyer has no other loans to service that will affect their debt-to-income ratio.

1. Core Central Region (CCR)

Being one of the most affluent and expensive regions in Singapore, the Core Central Region is home to neighbourhoods such as Holland Village, River Valley, Orchard, Tanglin and Sentosa.

Even at the lower end, the price of a 1,200 square-foot condominium could cost around S$2,224,602. In order to figure out how much you need to earn to purchase this property, we can simplify the calculations below:

Core Central Region
Property Price
Home Loan Tenure
Average Interest Rate
Monthly Home Instalment
Min. Monthly Income
30 years
3.5% p.a.

In the table above, we are assuming that a loan of S$1,668,452 is taken out for a period of 30 years after satisfying a 25% down payment. The monthly repayment of the home loan would then be S$7,492. To satisfy a debt-to-income ratio of 60%, the minimum monthly salary that you would need to earn is S$12,487 per month or $149,844 per annum. This is assuming that you have no other debt commitments, such as other mortgages and loans.

However, the numbers above only represent the lower end of prices in the Core Central Region. At the higher end of the real estate market, a 2,200 square-foot condominium in Postal District 9 could cost S$5,000,000. This means that in order to handle a monthly loan commitment of S$16,839, you would have to make at least S$28,065 a month or S$336,780 a year to satisfy the DTI requirements of 60%.

2. Rest of Central Region (RCR)

The rest of the central region consists of mid-to-upper tier neighbourhoods like Toa Payoh, Bukit Merah and Tiong Bahru. Property in this area can range from S$1,381 – S$1,786 per square foot depending on location. For the table below, we’re examining the price of a 1,000 square feet property in Paya Lebar Road:

Rest of Central Region
Property Price
Home Loan Tenure
Average Interest Rate
Monthly Home Instalment
Min. Monthly Income
30 years
3.5% p.a.

In the scenario above, taking a 30 year loan with a 25% down payment upfront would yield a monthly home repayment of S$6,337. In this case, to stay within the 60% DTI requirement, the average household income would have to be S$10,562 a month.

3. Outside Central Region (OCR)

For areas outside of the central region, prices can range from S$773 to S$1,712 per square foot. This includes neighbourhoods such as Clementi, Bedok South and Choa Chu Kang where prices are significantly lower compared to those in the Core Central Region and Rest of Central Region. The example below examines the price of a 1,163 square feet apartment in Bukit Batok:

Outside Central Region
Property Price
Home Loan Tenure
Average Interest Rate
Monthly Home Instalment
Min. Monthly Income
30 years
3.5% p.a.

Using the previous assumptions, your average household income would have to be S$4,300 in order to afford a property, assuming you’ve made a 25% down payment and opted for a 30 year loan tenure.

Average prices by district

If you’re wondering how private property prices differ by district, we’ve listed them out below. These are the average prices per square foot of non-landed private property transactions carried out in the month of April 2019:

DistrictAverage price psf
CCR1Cecil, Marina, Raffles Place, People's Park, Boat QuayS$2,413
2Anson Road, Chinatown, Tanjong PagarS$2,402
6High Street, Beach Road (Part), City Fall, Clarke QuayS$1,449
9Orchard Road, River Valley, CarinhillS$2,257
10Tanglin Road, Farrer, Holland, Bukit Timah, ArdmoreS$2,528
11Thomson, Watten Estate, Novena, NewtonS$1,637
RCR3Queenstown, Tiong Bahru, Alexandra, CommonwealthS$1,786
4Telok Blangah, WTC, Mount Faber, Harbourfront, SentosaS$1,381
5Clementi, Pasir Panjang, West Coast, Dover, Bouna VistaS$1,419
7Golden Mile, Middle Road, Bugis, Rochor, Beach RoadS$2,842
8Little India, Farrer Park, Serangoon RoadS$1,613
12Serangoon, Toa Payoh, BalestierS$1,435
13Braddell, Macpherson, Potong PasirS$1,636
14Sims, Paya Lebar, Geyland, EunosS$1,512
15Tanjong Rhu, Meyer, Marine Parade, Katong, Amber Road, Joo Chiat, East CoastS$1,577
20Mei Hwan, Thomson, Ang Mo Kio, Bishan, BraddellS$1,432
OCR16Kew Drive, Upper East Coast Road, Eastwood, Bedok, BayshoreS$1,045
17Flora, Loyang, ChangiS$1,039
18Simei, Tampines, Pasir RisS$1,210
19Hougang, Punggol, Sengkang, Serangoon GardenS$1,296
21Upper Bukit Timah, Ulu Pandan, Clementi ParkS$1,712
22Lakeside, Jurong, Boon Lay, TuasS$1,083
23Choa Chu Kang, Bukit Batok, Dairy Farm, Hillview, Bukit PanjangS$1,053
25Woodgrove, Kranji, Woodlands, AdmiraltyS$773
26Upper Thomson, Springleaf, MandaiS$1,270
27Sembawang, YishunS$930
28Seletar, Yio Chu KangS$1,274
Data from Square Foot Research. Prices are accurate as of April 2019.

Additional fees and duties

In addition to the costs above, property buyers also need to factor in the following fees & duties:

Down payment25% of property price for private properties
Stamp duty1% for the first S$180,000

2% for the next S$180,000

3% for the next S$640,000

4% for the remaining amount
Additional Buyer's Stamp Duty (ABSD)Singapore citizens buying their first residential property: 0%
Singapore citizens buying their second residential property: 12%
Singapore citizens buying their third and subsequent residential property: 15%
Singapore permanent residents buying their first residential property: 5%
Singapore permanent residents buying their second and subsequent residential property: 15%
Foreigners buying any residential property: 20%
Legal feesTo be paid to a lawyer to carry out due diligence on the property; typical fees range between S$2,500 and S$3,000
Valuation feesA fee paid to the bank in order to qualify for the loan being offered, usually S$200 to S$1500 depending on the type of property

In conclusion, purchasing a property is an important decision in which many factors, from loan eligibility to household income, have to be examined. This is even harder to manage if you are considering private properties in the country. To make this task simpler, it is important for homebuyers to examine all requirements before signing that agreement for their dream home.

This article was originally published in January 2018.
By Erik Gan
Erik is an ardent reader and writer whose favourite topics include tech startups, science fiction and pop culture. He is extremely passionate about the role of technology in improving lives, transforming businesses and reshaping industries. 


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