How Much Do You Need To Earn To Afford A Private Property In Singapore?

By Erik Gan / iMoney.sg | March 1, 2019 2:00 PM SGT
Buying your first home is a major decision that should not be taken lightly, as it requires a lot of research and financial planning before committing to an initial down payment. For Singaporeans, this decision is made even more difficult due to the fact that Singapore is one of the priciest places in the world to purchase a property.
Your costs will further skyrocket if you’re considering buying a private property in Singapore. Not only are they more expensive than public housing, their prices have risen by 1% in 2017 for the first time in four years, and they’re expected to rise further this year.
Of course, private properties aren’t without its perks. While 80% of Singaporeans may live in public housing, private housing offers prospective buyers the option of landed or non-landed properties. Private condominiums also provide access to recreational facilities like swimming pools or gyms, while public housing HDBs lack these amenities. However, be prepared to pay about three times more for private properties, as private properly developers mostly cater to foreigners and high-income Singaporeans.
Having said that, it is not impossible to purchase private property in the island republic. All it takes is a little financial planning and foresight in order to figure out how much you really need to earn in order to afford a private home here. An important factor to take into consideration is total household income or the total combined salary of both you and your spouse (if joint mortgage).

Calculating your debt to income ratio

Once you have calculated total household income, it is also important to determine your debt-to-income ratio or your capacity to manage monthly debt repayments. This is done by totalling up your monthly debt obligations and dividing this by your base salary. An individual earning a salary of S$4,800 per month (the average monthly salary in Singapore) who is paying S$1,500 for a home mortgage and an additional S$500 for a car loan would then have a debt-to-income (DTI) ratio of 41%.
In recent years, the Singaporean government has also eased debt servicing requirements in the country, allowing buyers with debt-to-income ratios of 60% and...