It’s a common adage that owning a condo is one of the five Cs that make up the “Singaporean dream”. Whether it be upgrading from an HDB flat to a condo unit, or buying a condo outright, many still aspire to buy a condo in Singapore. But is the thought of how much salary you need to buy a condo in Singapore intimidating?
In the past, condos were commonly priced at twice to thrice that of HDB flats. However, HDB resale flat prices have gone up over the course of the COVID-19 pandemic and are currently at an all-time high. A record 368 million-dollar units were transacted in 2022. Similarly, private property prices have steadily increased in the past few years have made it seem all too ‘impossible’ to afford to buy a condo.
How Much Salary to Buy a Condo in Singapore: A Video
Want a quick guide on assessing how much salary you need to buy a condo in Singapore? Watch our video to get started: we include condo eligibility, down payment, and how to get a bank loan to finance your condo purchase.
And if you’re thinking about buying a condo soon, you should definitely consider signing up for the upcoming Property TourTalks 2023: Singapore’s much-loved bus tour guiding different homebuyer profiles to their dream homes.
More on that later. First, how much do you need to earn to buy a condo today?
How Much Salary to Buy a Condo in Singapore: Overview
It’s true you’ll still need an above-average salary to buy a condo in Singapore. But how much salary you need to buy a condo in Singapore may be closer to your current salary than you think.
In this article, we’ll reveal some of the more ‘affordable’ condos in Singapore, before explaining how to finance one. Using the current (high) mortgage rates, we’ll then compare case studies of prospective condo buyers across income brackets to illustrate, realistically, how much salary you need to buy a condo in Singapore.
How Much Do Condos Cost?
Area in Singapore
The average cost of 3-bedroom condos in Singapore
Outside Central Region (OCR)
$900,000 to $1.5 million
Rest of Central Region (RCR)
$1.5 million to $3 million
Core Central Region (CCR)
$2.5 million and up
Condo prices in Singapore vary widely, depending on factors like the size of the unit and the location of the development. This guide will use 3-bedroom condo units as the case study: they’re good-sized houses for owner-occupiers including young couples, families, and HDB upgraders.
In the OCR, you’ll likely be able to find the most affordable 3-bedroom condo units for about $900,000 to $1.5 million. Among them, older and leasehold condo units tend to be the most affordable. For example, at the time of writing (29 August 2023), a 3-bedroom condo unit at The Woodgrove was going at $1 million. If you’re looking for a new or recently-launched condo unit, there are also options including The Commodore, with 4-bedroom units similarly going for upwards of $1.9 million.
In the RCR, a 3-bedroom condo unit can go from about $1.5 million to $3 million. Among them, condo units around Aljunied, Paya Lebar, and Geylang districts tend to be the most affordable. On the other end of the price-affordability spectrum, city fringe condo units closer and more accessible to the Central Business District (CBD) can go from upwards of $2 million.
Unsurprisingly, the CCR is where most of Singapore’s luxury condos are developed. While you may be able to find smaller 3-bedroom condo units going for slightly below $3 million, most of them will likely cost way more – when it comes to premium living, the sky’s the limit!
Condo Eligibility: Total Debt Servicing Ratio (TDSR) Applies
Applying for a bank loan to finance a condo is relatively straightforward. Criteria include your credit rating and Total Debt Servicing Ratio (TDSR) (i.e. the maximum percentage of your monthly gross income you’re allowed to use to pay off debt).
As long as your TDSR doesn’t exceed 55%, and you have enough savings or cash on hand to make the minimum condo down payment of 25% – at least 5% must be paid in cash, and the remaining 20% can be paid using your CPF or cash – you may be well on your way to completing your purchase of a condo in Singapore.
As there isn’t a limit to how much of your TDSR you devote to your condo mortgage, you can use up to 55% of your monthly gross income for your mortgage repayments. Good news: you’ll end up incurring a shorter loan tenure and paying lower overall interest costs. ‘Bad’ news: you won’t be able to borrow more money to finance other big purchases (e.g. a car) until your mortgage is fully repaid.
Likewise, if you already use 40% of your TDSR on other debts and credit, you’ll only be able to pay a maximum monthly instalment of up to 15% of your monthly gross income, with a corresponding loan tenure.
Condo Eligibility: Fewer Restrictions on Purchasing Eligibility, Income Cap, and Property Ownership
Based on the eligibility criteria to buy condos vs HDB flats in Singapore, you may actually conclude it’s ‘easier’ to buy a condo. Firstly, unlike HDB properties, anyone, including foreigners, can buy condos in Singapore.
Secondly, condo buyers aren’t assessed against an income ceiling, unlike prospective buyers of HDB flats and new executive condominiums (ECs).
Thirdly, condo buyers aren’t restricted on their ownership of other properties (i.e. you can be an owner of an HDB flat when you buy a condo). In that case, you’ll be subjected to Additional Buyer’s Stamp Duty (ABSD).
Now that you have an overview of your eligibility to buy a condo and what to expect, let’s analyse their prices and calculate how much you need to earn to buy a condo in Singapore.
How Much Salary to Buy a Condo in Singapore: A Guide
In this guide, we can only assess affordability ‘backwards’ based on the condo eligibility to buy a condo in Singapore. However, when you assess how much salary you need to buy a condo in Singapore, you shouldn’t only consider your debt servicing limits; factor in your cash flow situation too (i.e. the money you earn and spend). For example, we won’t assert that you can afford to buy a condo just because you pass eligibility criteria if your daily living expenses are too high.
In Singapore, you can only finance a condo using a bank loan and – at maximum, assuming no other debts – devote 55% of your monthly gross income to mortgage repayments (ie. the TDSR rule).
There are two main elements to think about:
The upfront minimum downpayment of 25% (of which at least 5% must be in cash)
The long-term and recurring monthly mortgage repayments
These are the steps you need to work backwards to your desired income:
1. Condo Eligibility: Work Out the Downpayment and Loan Quantum
$250,000 condo down payment, $750,000 loan
$375,000 condo down payment, $1,125,000 loan
$500,000 condo down payment, $1,500,000 loan
First, decide how much you want to loan and ‘split’ the condo’s price accordingly. For example, if you are eligible and want to take the maximum 75% loan, then work out the sums for your 25% down payment and the 75% loan quantum.
2. Condo Eligibility: Calculate Your Monthly Mortgage Repayments
Based on the loan amount, interest rate, and your preferred or maximum eligible loan tenure, calculate how much you would need to pay per month to fully repay the debt. For convenience, use our mortgage calculator to compute the estimated monthly repayments you would need to make.
Let’s say you are looking at 25 years of tenure and an interest rate of 3.75% p.a. (in terms of the lowest interest rate offered in the first year, this is the most competitive mortgage package offered on PropertyGuru Finance’s mortgage comparison tool, as of 23 March 2023).
Monthly mortgage repayments (3.75% p.a., 25 years)
$1,000,000 (i.e. $750,000 bank loan)
$3,856 per month
$1,500,000 (i.e. $1,125,000 bank loan)
$5,784 per month
$2,000,000 (i.e. $1,500,000 bank loan)
$7,712 per month
Do know the current high interest rate environment will not last forever. Interest rates tend to fluctuate alongside market conditions. Even though you may be taking on a bank loan with relatively high interest rates, do know you can always refinance your home loan later on. You can use tools like SmartRefi to keep an eye out for and secure a more competitive mortgage package.
3. Condo Eligibility: Work Out Your TDSR
Decide how much of your monthly income you intend to spend on paying the mortgage instalments. This will decide your preferred TDSR ‘limit’ and you can then work out the ‘full’ income you need to earn to afford it (i.e. 100%).
If you are trying to find out the minimum income you need to earn, then legally you can use up to 55% of your income on the mortgage (assuming you have no other debts). If you want a buffer and don’t want to ‘spend’ your entire TDSR quota on the home loan, you can adjust downwards.
How much salary to buy a condo in Singapore (based on 55% TDSR)
$7,011 per month
$10,516 per month
$14,022 per month
Median Salary in Singapore: How Much Salary to Buy a Condo in Singapore
According to the Manpower Research and Statistics Department of Singapore, the median gross monthly income from work (including employer CPF contributions) of full-time employed residents in 2022 is $5,070.
Based on this figure and the table above, it would seem that an entry-level condo in the RCR and OCR is affordable for many Singaporeans. This is especially if you consider the minimum income derived above as that of a working couple, who are joint-borrowing to finance a home together, instead of an individual’s income.
For many, it is not so crucial how much salary you need to buy a condo in Singapore – it is the hefty down payment. So, while it may be a stretch to buy a private condo as your first home, once you have worked for a few years and managed to save up enough for the down payment, you can consider buying a condo if you want.
Property TourTalks 2023: Buy and Finance Your Dream Condo This September 2023
Thinking about buying a condo? Then you might be wondering what options are available now and how you can go about financing one.
Good news: Singapore’s exclusive guided property bus tour series is back! Hop aboard the ride of property discovery and unlock a treasure trove of invaluable insights. With tailor-made tours catering to a diverse array of property seekers, choose from any of our specially curated bus tours, all set to depart this September 2023.
If you’re a first-time homebuyer interested to know more about the ins and outs of buying a condo, we recommend the New Beginnings tour. There will be two New Beginnings tours happening on 17 and 24 September 2023, from 10am to 12.30pm, taking you to select condos in the west and northeast of Singapore, respectively.
Have burning questions on how to buy and finance your dream home? Simply ask our experts in person, who will be onboard these bus tours across September 2023 to share their insights on the latest Singapore property market trends of 2023.
Need Help Financing a Condo?
In the meantime, you can also browse condos (and other properties) for sale on PropertyGuru, sussing out the best deals and comparing prices of the many listings in the market. If you’re shopping for a home loan for a new home or looking to refinance soon, PropertyGuru Finance has an ongoing campaign you can check out.
From now to 26 September 2023, secure a home loan or refinance with PropertyGuru Finance and secure up to $700 in shopping vouchers. Interested? Reach out to PropertyGuru Finance’s Mortgage Experts who can give you the rundown of how to qualify. They will also be able to offer you expert home financing advice tailored to your unique situation, all for free!