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Tuesday 13 July 2021

Here’s how much you need to earn to afford a condo [2021 Edition] - 99.co

When it comes to buying property, it pays to be mindful when working out how much you can borrow, so you don’t end up with a very expensive mistake.

To make life easier for property seekers in Singapore, we’ve crunched the numbers to provide the approximate salary that you need to be earning to afford a condo in locations within the Core Central Region (CCR) or the prime districts, Rest of Central Region (RCR) or the city fringes, and Outside Central Region (OCR) or the suburbs in 2021.

These estimates are made based on one’s ability to service their mortgage repayments with the following assumptions in mind:

Buyer is a Singapore Citizen buying property for the first time (and hence do not have to pay 12% ABSD).
Buyer pays a 25% down payment (maximising the 75% LTV, and takes up a 30-year loan tenure.
A medium-term interest rate of 3.5%, as advised by the Monetary Authority of Singapore.
Total Debt Servicing Ratio (TDSR) framework, which dictates that the total loans you need to service in a month should not exceed 60% of your gross monthly income.
Buyer does not have any other loans to service, including property, car loans, personal loans and student loans.

For consistency’s sake, we only looked at two-bedroom condo units for this article. Average prices are derived from sales transactions that occurred in the first half of 2021. We also used 99.co’s mortgage calculator to calculate estimated monthly mortgage repayments.

Eligibility versus affordability

Eligibility is not to be confused with affordability. In the property-buying context, it is important to note that one’s eligibility to take up a loan is not the same as one’s ability to ‘afford’ property.

Some financial experts say that your monthly mortgage repayment, including principal and interest, should not exceed 30% of your gross monthly income. Others say that such requirements are too stringent.

While opinions on what constitutes a golden mortgage-to-income ratio may differ, what’s important to note is that financial sustainability should always be a key focus when making big-ticket purchases like property. This is so you don’t end up starved of cash for your other goals (or having to eat bread every day).

Disclaimer: While every effort has been made to ensure that the information provided here is accurate, do note that it is merely for reference purposes and do not constitute investment or financial advice.

Pick a home based on what you can afford for both upfront and ongoing payments.

The salary you need to buy a new condo in 2021

Market segment	Average price	Loan amount (75%)	Downpayment (25%)	Estimated monthly instalment	Min. gross monthly income to satisfy 60% TDSR requirement
CCR	S$1.71 million	S$1.2825 million	S$427,500	S$5,758	S$9,597
RCR	S$1.48 million	S$1.11 million	S$370,000	S$4,984	S$8,307
OCR	S$1.14 million	S$855,000	S$285,000	S$3,839	S$6,398

If you meet the minimum income requirements, here are some new projects with two-bedder units that hover quite comfortably within the average price ranges in the respective market segments:

CCR:

RCR:

OCR:

(Browse the latest new launches in Singapore on 99.co and find your dream home today!)

The salary you need to buy a resale condo in 2021

Market segment	Average price	Loan amount (75%)	Downpayment (25%)	Estimated monthly instalment	Min. gross monthly income to satisfy 60% TDSR requirement
CCR	S$1.83 million	S$1.3725 million	S$457,500	S$6,163	S$10,272
RCR	S$1.32 million	S$990,000	S$330,000	S$4,445	S$7,408
OCR	S$1.04 million	S$780,000	S$260,000	S$3,502	S$5,837

If you’re looking to buy resale private property, here are some projects with two-bedder units that fall attractively within the average price ranges in the respective market segments.