If you’re thinking about buying a condo in Singapore, one of the most important things you need to consider is your budget. But how much do you actually need to earn to afford a condo in this bustling country? With the high cost of living and the ever-increasing prices of property, it can be challenging to determine how much you should be making to live comfortably while still being able to afford your dream condo. That’s where the ultimate salary breakdown comes in. In this article, we’ll take a deep dive into the costs associated with buying a condo in Singapore, from down payments and mortgage payments to monthly maintenance fees and property taxes. By the end of this article, you’ll have a better understanding of how much you need to earn to turn your Singapore condo dreams into a reality.
Average Condo Prices in Singapore
The first thing you need to know when it comes to buying a condo in Singapore is the average prices. The district map in Singapore is divided into different regions, namely:
- Central Core Region
- Rest of Central Region
- Outside Central Region
The overall median price of a non-landed private residential property in Singapore is around $2 million in first half of 2023. However, it’s important to note that prices can vary greatly depending on the location, size, and age of the property. Properties in different region command different price tags.
For example, if you’re looking to buy a condo in the central region of Singapore like The Atelier which is new condo launch, you can expect to pay a premium. Right now, the median price of a non-landed private residential property in the central region is around $2.5 million. If you’re willing to look further out, however, you can find more affordable options. In the outside central region, the median price is approximately $1.8 million.
It’s also worth noting that prices have been on the rise in recent years. In 2010, the median price of a non-landed private residential property in Singapore was $970,000. This means that prices have increased by over 50% in the past decade.
Calculating the Total Cost of Buying a Condo
Once you have an idea of the average prices of condos in Singapore, the next step is to calculate the total cost of buying a condo. This includes not just the purchase price, but also the other costs associated with the purchase.
One of the biggest costs to consider is the down payment. In Singapore, the minimum down payment for a condo is 25% of the purchase price. This means that if you’re buying a $1 million condo, you’ll need to put down at least $250,000.
In addition to the condo downpayment, you’ll also need to consider the mortgage payments. The amount you’ll need to pay each month will depend on the size of your down payment, the interest rate on your loan, and the tenure of your loan. As of May 2023, the average interest rate for housing loans in Singapore is around 4%.
Other costs to consider include the monthly maintenance fees, property taxes, and legal fees. Monthly maintenance fees can range from a few hundred dollars to over $1,000, depending on the size and amenities of the condo. Property taxes are based on the annual value of the property and can range from 0% to 23%. Legal fees will also vary depending on the complexity of the sale and the services of the lawyer.
Factors That Affect Condo Prices in Singapore
There are several factors that can affect condo prices in Singapore. One of the biggest is location. As mentioned earlier, condos in the central region of Singapore are typically more expensive than those in the outside central region. Other factors that can affect prices include the size and age of the property, the amenities available, and the surrounding neighborhood.
Another factor to consider is the state of the property market. When the market is hot, prices can rise rapidly, making it more difficult to afford a condo. Conversely, when the market is cool, prices may be more affordable.
Finally, government policies can also have an impact on condo prices. For example, the Additional Buyer’s Stamp Duty (ABSD) was introduced in 2011 to discourage foreign buyers and investors from driving up property prices. The ABSD is a tax that is levied on top of the existing Buyer’s Stamp Duty (BSD) and ranges from 5% to 60% of the purchase price, depending on the buyer’s nationality and residency status.
Salary Requirements for Buying a Condo in Different Areas of Singapore
So how much do you actually need to earn to afford a condo in Singapore? The answer will depend on several factors, including your down payment, mortgage payments, and other costs associated with the purchase.
Let’s take a look at some examples. If you’re looking to buy a compact 2 bedroom at Pullman Residence that costs around $2 million condo in the central region of Singapore, you’ll need to put down at least $500,000. Assuming a 30-year loan with a 4% interest rate, your monthly mortgage payments will be around $7,200. Add in monthly maintenance fees of $800 and property taxes of $5,000 per year, and you’ll need to earn at least $15,000 per month to comfortably afford your condo.
On the other hand, if you’re looking to buy a compact 2 bedroom condo like Bartley Residences outside central region (OCR) of Singapore, it will roughly costs you around $1.5 million, you’ll need to put down at least $375,000. Assuming the same loan tenure of 30 years and interest rate of 4%, your monthly mortgage payments will be around $5,370. Add in monthly maintenance fees of $500 and property taxes of $3,000 per year, and you’ll need to earn at least $10,000 per month to comfortably afford your condo.
As you can see, with the same type of 2 bedroom but in different locations, it command different prices and salary in order to afford it.
Understanding the Additional Buyer’s Stamp Duty (ABSD)
As mentioned earlier, the ABSD is a tax that is levied on top of the existing BSD and ranges from 5% to 60% of the purchase price, depending on the buyer’s nationality and residency status. The ABSD applies to all buyers, including Singapore citizens, permanent residents, and foreigners.
If you’re a Singapore citizen, you’ll need to pay an ABSD of 20% if you’re buying a second property. As a Singapore Permanent Resident, even If you’re buying your first property, the ABSD payable is 5%. Foreigners, on the other hand, need to pay an ABSD of 60% for all property purchases.
It’s worth noting that there are some exemptions and remissions available.
Financing Options for Condo Purchases in Singapore
If you’re looking to buy a condo in Singapore, there are several financing options available. The most common option is to take out a housing loan from a bank or financial institution. However, it’s important to note that there are several restrictions on housing loans in Singapore.
For example, the loan-to-value (LTV) ratio for housing loans in Singapore is capped at 75%. This means that you’ll need to put down at least 25% of the purchase price as a down payment. In addition, the tenure of the loan is capped at 30 years, and the total debt servicing ratio (TDSR) is capped at 55% of your monthly income.
Another option is to use your Central Provident Fund (CPF) savings to finance your condo purchase. The CPF is a mandatory savings scheme in Singapore, and it can be used to pay for housing, among other things. However, there are several restrictions on using CPF savings for housing, including the property type and the age of the property.
Tips for Saving Money on Condo Purchases
Buying a condo in Singapore can be a significant financial investment, but there are several ways to save money on your purchase. Here are a few tips:
- Look for properties outside the central region of Singapore. As mentioned earlier, condos in the outside central region are typically more affordable than those in the central region.
- Consider older properties. Older properties may be more affordable than newer properties, and they may also have more room for negotiation on the purchase price. But of course, older properties tend to have more maintenance works to be done as compared to newer ones.
- Negotiate with the seller. Don’t be afraid to negotiate on the purchase price, especially if the property has been on the market for a while.
- Be mindful of the additional costs. Remember to factor in the additional costs associated with buying a condo, such as maintenance fees and property taxes.
Conclusion: Is Buying a Condo in Singapore Worth It?
Buying a condo in Singapore can be a significant financial investment, but for many people, it’s worth it. Condos in Singapore offer a convenient and luxurious lifestyle, and they can also be a good investment opportunity.
However, it’s important to carefully consider your budget and the costs associated with buying a condo before making a purchase. By understanding the average condo prices in Singapore, calculating the total cost of buying a condo, and considering your financing options, you can make an informed decision about whether or not buying a condo in Singapore is right for you.
