Looking to buy private property but not sure how much you can afford? Never fear, for 99 is here – to help you make informed property decisions and beyond!
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 2020.
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, 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 total 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 that are between 700 sq ft and 900 sq ft in this article. Median prices are derived from sales transactions that occurred between 3Q2018 and 3Q2019. 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.
The salary you need to buy a new condo in 2020
If you meet the minimum income requirements, here are some new projects with two-bedder units that hover quite comfortably within the median price ranges in the respective market segments:
Fourth Avenue Residences and Martin Modern within the prime districts. Parc Esta and Sims Urban Oasis within the city fringes. And in the suburbs, projects like Parc Komo and Parc Botannia, which both hover comfortably within the median price range.
The salary you need to buy a resale condo in 2020
If you’re looking to buy resale private property, here are some projects with two-bedder units that fall attractively within the median price ranges in the respective market segments.
Find out more about your affordability range with 99.co’s affordability calculator!
Would you prefer to buy a new condo or a resale condo? Voice your thoughts in our comments section or on our Facebook community page.
Looking for a property? Find the home of your dreams today on Singapore’s fastest-growing property portal 99.co! You can also access a wide range of tools to calculate your down payments and loan repayments, to make an informed purchase.