A research report from the DBS Group analyst team reveals that a household's monthly income needs to be at least SGD 7,000 to afford a new private residence.

According to the analysis, buyers with monthly incomes ranging from SGD 6,000 to SGD 20,000 can afford to purchase Build-to-Order (BTO) flats and four-room resale Housing and Development Board (HDB) flats. However, to afford a new private residence, a monthly income of at least SGD 14,000 (approximately CNY 70,000) is required.

The report indicates that the down payment that buyers need to pay is equivalent to 21 to 38 months of their household income. This implies that buyers need to save half of their income each month and, at a minimum, take five to seven years to have the economic capacity to purchase a property.

Over the past two years, property prices in Singapore have been on the rise. The government has implemented several measures, including increasing property taxes, to cool the real estate market. In July of this year, private home prices in Singapore experienced a 0.4% decline for the first time since 2020. However, due to the significant increase before that, many homebuyers still feel immense pressure when buying a home.

Data from the Ministry of Manpower shows that resident incomes in 2023 (excluding inflation) are higher than in 2022, but considering inflation, real wage levels have still declined. In 2023, the median monthly nominal income increased by 2.5%, but real wages for residents in the 20th percentile decreased by 2.1%.

Despite the government taking various measures to address rising property prices, the issues in the real estate market remain complex due to various influencing factors. DBS Group Research predicts that the momentum of overall property prices in Singapore may slow down next year, possibly remaining stable or increasing by 2%. In this context, homebuyers will continue to face challenges, and the government will need to further strive to address issues in the real estate market.