Your search results

How Much You Need to Earn to Afford a Condo 2023

Posted by Jayson Ang on October 30, 2023

| 0

TLDR

When considering investing in a private property in Singapore, it’s important to understand your borrowing capacity. Financial experts recommend that your monthly mortgage repayment should not exceed 30% of your gross monthly income. To determine the estimated monthly income needed to buy a new condo, factors such as location and type of property must be considered. Median income figures from the Ministry of Manpower can provide insights into affordability. Dual-income couples have higher potential for condo financing. Property market trends and measures implemented affect condo prices, making it essential to make informed decisions regarding property purchases. Consulting with real estate experts can provide valuable guidance on whether to buy, sell, or wait, ensuring a strategic and data-driven approach for your real estate journey.

Are you planning to invest in a private property but uncertain about your affordability? Don’t worry, I am here to assist you in making informed decisions regarding properties and more!

Being cautious while determining your borrowing capacity is crucial while purchasing a property. This will prevent you from making a costly mistake.

Eligibility versus affordability

Eligibility for a home loan should not be confused with the ability to afford a property. To afford a condo in Singapore, financial experts suggest that your monthly mortgage repayment, including principal and interest, should not exceed 30% of your gross monthly income. This is also known as the Mortgage Servicing Ratio (MSR) for HDB flats and new ECs. However, some experts believe that this requirement is too strict. While opinions may vary on what constitutes an ideal mortgage-to-income ratio, it is crucial to prioritize financial sustainability when making significant purchases such as property. This will prevent you from compromising other financial goals or resorting to a diet of instant noodles and bread every day.

How much do you need to earn to buy a condo?

In order to assist those looking for properties in Singapore, we have analyzed data to determine the approximate income required to afford a condominium. The price of the condominium will vary based on factors such as whether it is newly built or its location in the Core Central Region (CCR), which tends to be more expensive. Our estimates are based on the ability to make mortgage repayments and take into account certain assumptions.

As a Singaporean citizen, if you do not own any other residential properties in the country, you are exempted from paying a 17% Additional Buyer’s Stamp Duty (ABSD).
You will be required to make a down payment of 25%, which will allow you to take advantage of the maximum 75% loan-to-value (LTV) limit. The loan tenure will be for a period of 30 years.
We have implemented a 4% interest rate for the medium-term, in accordance with the guidance provided by the Monetary Authority of Singapore.
It is confirmed that you have no other outstanding loans to attend to, this includes loans for properties, vehicles, personal purposes, and education.
The Total Debt Servicing Ratio (TDSR) framework sets a limit to the total amount of loans an individual can service in a month. This limit should not exceed 55% of their gross monthly income. It is important to adhere to this framework to ensure financial stability and avoid overburdening oneself with debt.

The estimated monthly income you need to buy a new condo

*Please be aware that the figures provided are based on average pricing and may not reflect the actual cost. It is advisable to utilize my mortgage calculator, based on the exact price, to determine if it aligns with your financial capacity.

Leedon Green

Rest of Central Region (RCR):

Outside Central Region (OCR):

The estimated monthly income you need to buy a resale condo

Despite the implementation of two rounds of measures aimed at reducing the overheating of the property market in December 2021 and September 2022, the prices of condominiums have gone up by 8.1% in 2022. The price increase was highest among RCR condos at 9.7%, followed by OCR condos at 9.3% and CCR condos at 4.8%. To find reasonably priced condos, it may be worthwhile to consider purchasing resale condos.

*Please be aware that the figures provided are based on an average price and may not reflect the actual cost. To accurately determine if the property is affordable for you, we suggest utilizing my mortgage calculator with the actual price in mind.

Median salary in Singapore: Can I afford a condo?

After learning about the cost of new and resale condos in Singapore, you may be wondering if purchasing a condo is feasible for you. To answer this question, we will examine the income figures published by the Ministry of Manpower’s Research and Statistics Department.

As per their data, the median gross monthly income from work, including employer CPF contributions, for full-time employed residents in 2022 is S$5,070, which is an 8.33% increase from the previous year. The median indicates that half of the workers earn less than this amount, while the other half earns more.

If you and your partner are a dual-income couple, you will have double the earning potential to finance a condo purchase. With your combined income, you will be able to afford condos situated in OCR and RCR regions.

After working and saving up for a few years, you and your partner can pay the substantial downpayment and purchase your dream condo.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

Mandarin Top 5

Top 5 Considerations : Uncover the Secrets of Buying Older Properties – What They Won’t Tell You!

Jayson Ang – November 25, 2024 –

Buying an older property can be a dream come true for many homebuyers, as these homes often come with unique...

All Blog Posts Buying Tips

When Is the Right Time to Sell Your House?

Jayson Ang – December 31, 2022 –

TLDR When deciding to sell your house in Singapore's competitive real estate market, timing is crucial. Selling during a seller's...

All Blog Posts Buying Tips Opinion Reports

What Difference in One Year After the ABSD Hike in April 2023?

Jayson Ang – December 7, 2024 –

TLDR The recent hike in ABSD rates, especially the increase from 30% to 60% for foreign buyers, has dramatically affected...

All Buying Tips

What Type of Properties Can a Permanent Resident PR Buy in Singapore?

Jayson Ang – August 13, 2023 –

TLDR When it comes to purchasing property in Singapore as a Permanent Resident or Foreign National, there are specific restrictions...

All Blog Posts Opinion Selling Tips

When Should You Consider Lowering the Price of Your Property That Has Been on the Market for Months?

Jayson Ang – December 3, 2024 –

TLDR Selling a property can be challenging without the right price strategy. Adjust your asking price to attract more buyers...

Mandarin Top 5

Top 5 : Questions Should Investors Be Asking Before Investing In Singapore’s High-End Rental Market

Jayson Ang – February 1, 2025 –

Singapore's high-end rental market has been a hot topic of discussion among investors worldwide. With the city-state's robust economy, excellent...

Mandarin Top 5

Top 5 Bookstores in Singapore for Book Lovers

Jayson Ang – March 27, 2024 –

Singapore, a bustling cosmopolitan city, is known for its rich cultural heritage, diverse population, and of course, its love for...

All Blog Posts Buying Tips Opinion Selling Tips

6 Indicators and Measures to Determine if Your Home Has Unrecognized Profits

Jayson Ang – November 11, 2024 –

TLDR The booming real estate market presents opportunities for homeowners to profit from selling their properties. Two key signs that...

All Blog Posts Buying Tips

35 Brand New Condominiums Nearing Their ABSD Deadline 2023

Jayson Ang – March 4, 2023 –

TLDR The blog post discusses the looming ABSD deadline for several new launch condos in 2023, highlighting the impact on...

Mandarin Top 5

Top 5 Luxury Dining Experiences in Singapore

Jayson Ang – July 8, 2024 –

Singapore, known as the Lion City, is a melting pot of cultures, cuisines, and luxury experiences. With its rich history,...

All Blog Posts Selling Tips

Thinking of Selling Your Home in 2024? 5 Vital Realities Every Seller Must Face

Jayson Ang – November 27, 2024 –

TLDR From 2022 to 2024, Singapore's housing market underwent significant changes, with a shift from scarcity to a boom in...

All Blog Posts Buying Tips

Subscribe to Jayson Ang’s Singapore Property Newsletter

Jayson Ang – December 27, 2022 –

TLDR Jayson Ang's Singapore Property Newsletter offers valuable insights on real estate investments, market trends, and expert advice. The newsletters...

Mandarin Top 5

Exploring Singapore: The Top 5 Surprising Facts You Never Knew

Jayson Ang – March 13, 2025 –

Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...

All Buying Tips

3 Steps to Prevent Rental Scams

Jayson Ang – January 23, 2024 –

TLDR: Prevent Rental Scams in Real Estate Scammers are targeting prospective tenants by impersonating Real Estate Salespersons (RES) to deceive...

Mandarin Top 5

Top 5 Surprising Benefits of Investing in Singapore Real Estate for Foreigners

Jayson Ang – October 27, 2024 –

Singapore, a thriving city-state in Southeast Asia, has become an attractive destination for foreign investors looking to diversify their investment...

Mandarin Top 5

Top 5 Romantic Date Spots in Singapore

Jayson Ang – March 18, 2024 –

Singapore, known for its stunning skyline and diverse culture, is a melting pot of romantic opportunities just waiting to be...

Mandarin Top 5

From Garden City to Smart Nation: Singapore’s Top 5 Goals Building a Sustainable and Livable City

Jayson Ang – February 20, 2024 –

Singapore is a small island city-state with a population of over 5 million people. Its urban landscape is constantly evolving,...

All Buying Tips Reports

2024 Residential Property Market Outlook

Jayson Ang – December 22, 2023 –

TLDR The market outlook for 2024 suggests continued uncertainties affecting housing demand and risk appetite due to geopolitical tensions, macroeconomic...