9 min read
There are multiple scenarios why more couples have sought out resale flats as their housing solution in the last couple of years. Stricter BTO requirements (salary caps, one person must be Singaporean and the other be a PR), long waiting times, constant failed ballots, and the inflexibility of location choice are among the few reasons why resale has been in high demand.
The demographic of resale buyers is also a wide range. From condo downgraders, permanent residents, international couples (Singaporeans marrying a foreigner), local couples and singles who failed the ballot exercises lots of times, families looking to upgrade to a bigger space, families looking to downgrade to a smaller space… The colour and diversity of this market have kept the resale space very liquid.
The resale option is admittedly becoming expensive, as we have established with our singles resale article analysis, but it’s still much more ‘affordable’ when compared to private property.
Today, we’ll be exploring how much household income is needed to afford 4-room and 5-room resale flats.
Affordability
Your affordability as a buyer usually depends on 3 factors: Your down payment contributions, your monthly income, and the mortgage interest rates.
The question we’re exploring today is how much you’ll actually need in order to afford a resale comfortably, including the cost of mid-range renovations (since all resale purchases will always come with reno and furnishing needs).
It’s important to note that I will not be factoring in any form of grants. So the numbers you’ll see would be as raw as numbers can get.
How much do 4-room and 5-room resale flats cost now?
Here’s a look at what resale flat prices are so far in 2024 (up until early July):
| HDB Estate | Type | 4 Room Flat Prices | 5 Room Flat Prices |
| Ang Mo Kio | Mature | $640,883 | $848,649 |
| Bedok | Mature | $585,421 | $732,594 |
| Bishan | Mature | $728,844 | $1,027,489 |
| Bukit Merah | Mature | $843,392 | $971,980 |
| Bukit Timah | Mature | $650,000 | $1,085,000 |
| Central Area | Mature | $831,545 | $1,103,636 |
| Clementi | Mature | $702,317 | $957,857 |
| Geylang | Mature | $720,361 | $876,407 |
| Kallang/Whampoa | Mature | $844,747 | $888,545 |
| Marine Parade | Mature | $540,000 | $908,000 |
| Pasir Ris | Mature | $599,386 | $694,263 |
| Queenstown | Mature | $861,903 | $1,003,000 |
| Serangoon | Mature | $606,765 | $754,832 |
| Tampines | Mature | $630,372 | $744,980 |
| Toa Payoh | Mature | $779,906 | $960,000 |
| Average | $704,389 | $903,816 |
| HDB Estate | Type | 4 Room Flat Prices | 5 Room Flat Prices |
| Bukit Batok | Non-Mature | $581,928 | $742,439 |
| Bukit Panjang | Non-Mature | $534,381 | $650,999 |
| Choa Chu Kang | Non-Mature | $513,448 | $604,778 |
| Hougang | Non-Mature | $575,084 | $708,988 |
| Jurong East | Non-Mature | $516,587 | $647,986 |
| Jurong West | Non-Mature | $503,967 | $593,740 |
| Punggol | Non-Mature | $626,971 | $721,052 |
| Sembawang | Non-Mature | $561,864 | $618,568 |
| Sengkang | Non-Mature | $591,854 | $655,080 |
| Woodlands | Non-Mature | $523,158 | $636,720 |
| Yishun | Non-Mature | $523,380 | $656,739 |
| Average | $550,238 | $657,917 |
The difference in 4 and 5-room flat prices vary about $200k apart in mature estates which is quite large as compared to the difference in non-mature ones which comes to about $120k.
This could be because those willing to pay for prime areas at a bigger size are buyers of a certain wealth class with established financials such as a high-paying job or good family background (or both) and can fork out a pretty penny to pay for the best.
From the scatterplot, you can see that the averages of resale flat prices for the two are the following:
| Type | 4-Room Flat | 5-Room Flat |
| Mature | $704,389 | $903,816 |
| Non-Mature | $550,238 | $657,917 |
For our financial exercise, I’m going to remove the Central Area as this is quite a niche area where buyers are well-heeled and aren’t a significant representative of the buying population. I’ll average the prices across all other estates, both mature and non-mature, to derive a single 4 and 5-room flat price too.
This brings our average 4-room flat price to $631,477 and our 5-room flat price to $787,627.
We have our average cost now, but what about income? Here’s a look at the different levels of income and the prices of HDB flats you can afford:
| Salary (Gross) | Max Monthly Mortgage | Max Loan (80%) | Downpayment (20%) | 4-Room Flat Price |
| $4,400 | $1,320 | $278,357 | $69,589 | $347,900 |
| $4,600 | $1,380 | $291,010 | $72,752 | $363,800 |
| $4,800 | $1,440 | $303,662 | $75,916 | $379,600 |
| $5,000 | $1,500 | $316,315 | $79,079 | $395,400 |
| $5,200 | $1,560 | $328,967 | $82,242 | $411,200 |
| $5,400 | $1,620 | $341,620 | $85,405 | $427,000 |
| $5,600 | $1,680 | $354,272 | $88,568 | $442,800 |
| $5,800 | $1,740 | $366,925 | $91,731 | $458,700 |
| $6,000 | $1,800 | $379,578 | $94,894 | $474,500 |
| $6,200 | $1,860 | $392,230 | $98,058 | $490,300 |
| $6,400 | $1,920 | $404,883 | $101,221 | $506,100 |
| $6,600 | $1,980 | $417,535 | $104,384 | $521,900 |
| $6,800 | $2,040 | $430,188 | $107,547 | $537,700 |
| $7,000 | $2,100 | $442,841 | $110,710 | $553,600 |
| $7,200 | $2,160 | $455,493 | $113,873 | $569,400 |
| $7,400 | $2,220 | $468,146 | $117,036 | $585,200 |
| $7,600 | $2,280 | $480,798 | $120,200 | $601,000 |
| $7,800 | $2,340 | $493,451 | $123,363 | $616,800 |
| $8,000 | $2,400 | $506,103 | $126,526 | $632,600 |
| $8,200 | $2,460 | $518,756 | $129,689 | $648,400 |
| $8,400 | $2,520 | $531,409 | $132,852 | $664,300 |
| $8,600 | $2,580 | $544,061 | $136,015 | $680,100 |
| $8,800 | $2,640 | $556,714 | $139,178 | $695,900 |
| $9,000 | $2,700 | $569,366 | $142,342 | $711,700 |
| $9,200 | $2,760 | $582,019 | $145,505 | $727,500 |
| $9,400 | $2,820 | $594,672 | $148,668 | $743,300 |
| $9,600 | $2,880 | $607,324 | $151,831 | $759,200 |
| $9,800 | $2,940 | $619,977 | $154,994 | $775,000 |
| $10,000 | $3,000 | $632,629 | $158,157 | $790,800 |
| $10,200 | $3,060 | $645,282 | $161,320 | $806,600 |
| $10,400 | $3,120 | $657,935 | $164,484 | $822,400 |
| $10,600 | $3,180 | $670,587 | $167,647 | $838,200 |
| $10,800 | $3,240 | $683,240 | $170,810 | $854,000 |
| $11,000 | $3,300 | $695,892 | $173,973 | $869,900 |
| $11,200 | $3,360 | $708,545 | $177,136 | $885,700 |
| $11,400 | $3,420 | $721,197 | $180,299 | $901,500 |
| $11,600 | $3,480 | $733,850 | $183,463 | $917,300 |
| $11,800 | $3,540 | $746,503 | $186,626 | $933,100 |
| $12,000 | $3,600 | $759,155 | $189,789 | $948,900 |
But income is just one factor. You’ll still have to renovate a flat when you move in, right? So let’s take that into consideration as well!
How much does renovation and furnishing cost?
Today, I think it is almost unheard of for resale buyers to not renovate or re-furnish their flats. One of the biggest advantages of getting a resale flat in Singapore is the fact that you have more freedom in terms of re-optimising your floor plan to suit your living needs.
Renovations can be light, and depending on the condition of the flat, you may just be able to get away with repainting some walls and adding new kitchen cabinetry.
So I will assume here that we’ll be doing a mid-range renovation, which would include new flooring, new paint, new kitchen and bathroom fixtures of moderate quality and maybe a reconfiguration of the layout.
It’s difficult to get the actual cost breakdown, but we can reasonably assume the following cost for renovations in 2024. Of course, the more basic or complex the renovation is, the more affordable or expensive it gets. So this is just an estimate.
| Renovation budget for 4-room Resale HDB | Renovation budget for 5-room Resale HDB |
| $60,000 | $80,000 |
And so, this brings our home purchase and reno to a grand total of:
| Buying and renovating a 4-Room Resale HDB | Buying and renovating a 5-Room Resale HDB |
| $691,477 | $867,627 |
Do note that you can also take a renovation loan, usually up to a value of $30,000 with a loan tenure of 5 years. While this sounds like a good idea, bear in mind that the interest cost for a renovation loan can be quite hefty depending on which bank you go with. This is up to the individual – if you have set the cash aside for renovations, then it may make sense to pay in cash to save on interest costs. Otherwise, you can take a loan but your overall cost would be higher over time.
For this exercise, we’ll assume the renovation loan won’t be taken as it’s a more conservative way to look at affordability.
Finally, there’s the housing grants. Some opine that “HDB grants are not really yours”, but this isn’t true. The grants are disbursed in the form of CPF and it goes back to your CPF account when the flat is sold later on. One thing is for sure, when you qualify and accept the grant, it can make a huge difference to your loan.
For the uninitiated, here are the grants you can qualify for (we’ll assume you’re a first-timer couple applying for a 4 or 5-room flat)
- CPF Housing Grants (Families)
- Enhanced CPF Housing Grants (Families)
- Step-Up CPF Housing Grant (Families) – For second-timers, which we won’t assume is the case in this exercise
- Proximity Housing Grant (Families)
Do note that if you are not a first-timer household or not a couple/married, the amounts are different. Check out HDB’s website for more details.
The CPF Housing Grants is straightforward. First-timer households qualify for $80,000 in grants for a 4-room flat, and $50,000 for a 5-room flat. This assumes both applicants are Singaporean Citizens. It’s $10,000 less respectively for SC/PR households.
Another straightforward grant is the Proximity Housing Grant (PHG). This is $30,000 if you live with your parent/child or $20,000 if you live within a 4 km radius of your parent/child. Getting this grant does restrict your location but it can be extremely helpful if you’re looking to stay near your parents anyway.
For this exercise, we’ll assume the CPF Housing Grants are taken as the rest are conditional on income and location of the chosen flat.
How much do we need to make to afford a 4-Room/5-Room HDB resale comfortably?
Here comes the fun part of generic financial planning, because the projections from here on out are subjective and the numbers can change depending on individual circumstances.
The first thing to take a look at is the amount of cash on hand you’ll need for this purchase. You’ll need the minimum downpayment for the purchase, which is 20% for HDB loans and 25% for bank loans.
Let’s just assume we’re taking an HDB loan for the sake of simplicity and transparency since the rates are publicly available for all to see (currently at 2.6%).
Here’s a look at the downpayment and monthly mortgage payments you’ll be making:
| Using HDB Loan | 4 Room | 5 Room |
| Flat price (median) | 631,477 | 787,627 |
| Minimum Downpayment (20%, HDB Loan) | $126,295 | $157,525 |
| Less: CPF Housing Grants | $80,000 | $50,000 |
| Downpayment after grants | $46,295 | $107,525 |
| Add: Renovation Costs | $60,000 | $80,000 |
| Total Downpayment after grants & renovation costs | $106,295 | $187,525 |
| Downpayment per person | $53,148 | $93,763 |
| Monthly mortgage (HDB Loan) | $2,292 | $2,859 |
So the cash upfront you need for renovations and downpayment after grants is $106,295 and $187,525.
This seems like a lot of money, and it is, but split between the both of you fairly, you’ll each be looking at contributing around $50k for your 4-room resale purchase and $100k if you decide to get a 5-room resale.
The more cash you can contribute, the lesser the loan amount, and thus the lower the monthly mortgage. But putting more down doesn’t always mean it’s worth it, so it’s best that you crunch the numbers and see what’s the difference when it comes to total interest payments and if it’ll be worth forking over more down payment contributions.
Now, I always like to recommend that mortgage or rent be no more than 33% of your monthly income to be considered “comfortable”. This number can be adjusted based on your own perceptions of comfort.
However, in Singapore, buyers have to meet the 30% Mortage Servicing Ratio (MSR). Thus, your monthly mortgage cannot even exceed 30% of your household income.
This means that the minimum income to afford the average 4-room and 5-room flat here is $7,640 and $9,529 respectively.
In my perspective, 30% is a comfortable amount to pay towards rent or your mortgage, so I’d say this income level would put someone in a pretty decent position.
My brain sort of bugged out for a bit writing this and running the numbers, because resale flats don’t seem that much more expensive suddenly, especially when you consider the fact that you can pay it off via CPF. So now that I’ve crunched the numbers I totally see why many couples gun after resale if they’re within that household income range.
And voila, we have our answer.
In conclusion, for a couple to afford a 4-Room Resale HDB and a decent renovation, they would need $106,295 for the downpayment and renovation budget and a household income of $7,640.
If you’re looking for a 5-room resale flat, you would need $187,525 for the downpayment and renovation budget, and a household income of S$9,529.
In this case, I believe the most difficult part is coming up with the downpayment. A couple fresh out of university (mid-20s) who worked for about 5 years is then expected to cough up close to $100,000+ for a resale 4-room flat. And this is after grants too!
Have you seen those videos on “how to save and invest $100K by the time you’re 30”? Those videos promote being able to have $100k in investable assets by that age. In Singapore, all of it will have to go to the home.
And it’s for this reason that most couples go for the BTO option. Like new launches, you don’t have to cough up so much at the start, and with the Staggered Downpayment Scheme, BTOs are made even more affordable. Moreover, the renovation costs you find online do not usually include white goods, things like your fridge, washing machine, etc.
As far as affordability goes, as long as you save and manage your finances well (on top of having a good-paying job), getting a 4-room or 5-room resale flat would be well within your reach if you meet the criteria listed above.
I also didn’t factor in the Enhanced CPF Housing Grant which can be quite substantial, so if you are eligible for any, congrats, the numbers get lower and become more attainable and comfortable.
For example, we learned that a household earning $7,640 per month can comfortably afford a 4-room flat based on median prices (outside of Central Area) plus the renovation cost.
Assuming this household income is consistent over the past 12 months, the couple would qualify for a $15,000 grant which helps to further reduce the downpayment needed. For more on the grant amount, please refer to HDB’s table here.
Of course, this is just based on the overall prices of mature and non-mature flats across all ages in Singapore that have transacted in the first half of this year, so I’ll end this article with a breakdown of flat prices in this period but across different ages.
Why? Because aside from location, buyers can choose to stay in older flats for greater affordability while those who want something newer and are willing to pay more can look towards younger flats. You’ll just have to add on the renovation costs as I did in the exercise above.
Do note that just because flats are older doesn’t mean they’ll cost less than their younger counterparts. An older flat that’s close to the MRT can command more than a newer flat that’s a couple of bus stops away from the MRT.
Here’s a breakdown of HDB transactions by age in 2024 so far:
10 years or younger
| ESTATE | 4 ROOM | 5 ROOM |
| ANG MO KIO | $950,800 | $1,080,000 |
| BEDOK | $808,000 | $945,000 |
| BUKIT BATOK | $628,000 | $775,000 |
| BUKIT MERAH | $909,500 | $1,500,000 |
| BUKIT PANJANG | $578,888 | $721,000 |
| CENTRAL AREA | No Data | No Data |
| CHOA CHU KANG | $560,000 | $650,000 |
| GEYLANG | $966,000 | No Data |
| HOUGANG | $630,000 | $790,888 |
| JURONG EAST | $649,000 | No Data |
| JURONG WEST | $590,000 | $721,500 |
| KALLANG/WHAMPOA | $1,000,000 | $1,200,000 |
| PASIR RIS | $729,000 | $825,000 |
| PUNGGOL | $630,000 | $778,000 |
| QUEENSTOWN | $990,000 | No Data |
| SEMBAWANG | $590,000 | $728,888 |
| SENGKANG | $620,000 | $760,000 |
| TAMPINES | $722,888 | $882,000 |
| TOA PAYOH | $977,500 | No Data |
| WOODLANDS | $594,000 | $731,000 |
| YISHUN | $565,000 | $688,000 |
10 – 19 years old
| ESTATE | 4 ROOM | 5 ROOM |
| ANG MO KIO | $822,500 | $1,060,000 |
| BEDOK | $750,000 | $980,000 |
| BUKIT BATOK | $530,000 | $645,000 |
| BUKIT MERAH | $928,000 | $1,090,000 |
| BUKIT PANJANG | $580,000 | $663,444 |
| CENTRAL AREA | $1,329,000 | $1,425,000 |
| CHOA CHU KANG | $537,500 | No Data |
| GEYLANG | $865,000 | $994,500 |
| HOUGANG | $625,500 | $922,500 |
| JURONG EAST | $610,000 | No Data |
| JURONG WEST | $541,944 | $605,000 |
| KALLANG/WHAMPOA | $897,500 | $1,031,000 |
| PASIR RIS | No Data | No Data |
| PUNGGOL | $638,944 | $820,000 |
| QUEENSTOWN | $910,000 | $1,135,000 |
| SEMBAWANG | $520,000 | $560,000 |
| SENGKANG | $622,000 | $680,000 |
| TAMPINES | $800,000 | $916,500 |
| TOA PAYOH | $924,000 | $1,295,000 |
| WOODLANDS | $572,500 | $682,500 |
| YISHUN | $565,000 | $695,000 |
20 – 29 years
| ESTATE | 4 ROOM | 5 ROOM |
| ANG MO KIO | $762,500 | $935,000 |
| BEDOK | $675,888 | $805,000 |
| BUKIT BATOK | $558,000 | $695,000 |
| BUKIT MERAH | $872,500 | $980,000 |
| BUKIT PANJANG | $523,500 | $649,000 |
| CENTRAL AREA | $617,500 | $807,000 |
| CHOA CHU KANG | $490,000 | $586,000 |
| GEYLANG | $867,500 | $1,050,000 |
| HOUGANG | $543,444 | $682,000 |
| JURONG EAST | $569,000 | $738,888 |
| JURONG WEST | $503,000 | $590,000 |
| KALLANG/WHAMPOA | $779,000 | $935,000 |
| PASIR RIS | $584,000 | $690,000 |
| PUNGGOL | $534,000 | $614,944 |
| QUEENSTOWN | $820,000 | $1,000,000 |
| SEMBAWANG | $510,000 | $580,000 |
| SENGKANG | $526,000 | $610,000 |
| TAMPINES | $596,500 | $722,944 |
| TOA PAYOH | $830,000 | $950,000 |
| WOODLANDS | $508,000 | $615,000 |
| YISHUN | $530,000 | $616,500 |
30 years and older
| ESTATE | 4 ROOM | 5 ROOM |
| ANG MO KIO | $612,944 | $710,000 |
| BEDOK | $528,000 | $774,000 |
| BUKIT BATOK | $598,000 | $729,444 |
| BUKIT MERAH | $890,000 | $995,000 |
| BUKIT PANJANG | $550,000 | $632,500 |
| CENTRAL AREA | No Data | $1,133,500 |
| CHOA CHU KANG | $512,000 | $595,000 |
| GEYLANG | $876,000 | $1,017,444 |
| HOUGANG | $588,000 | $701,144 |
| JURONG EAST | $495,000 | $650,000 |
| JURONG WEST | $492,944 | $600,000 |
| KALLANG/WHAMPOA | $787,500 | $920,000 |
| PASIR RIS | $594,000 | $695,000 |
| PUNGGOL | $618,000 | $702,000 |
| QUEENSTOWN | $902,500 | $1,119,444 |
| SEMBAWANG | $572,500 | $617,000 |
| SENGKANG | $602,500 | $650,000 |
| TAMPINES | $611,000 | $728,000 |
| TOA PAYOH | $879,000 | $1,000,000 |
| WOODLANDS | $528,000 | $625,000 |
| YISHUN | $535,000 | $650,000 |
While the conclusion of this article may not be the answer most couples would like to hear, it is important to be realistic about your home purchase and make decisions you can bear financially. We hope that with these numbers, you’ll be able to plan your property journey a little better.
Have a specific situation you’d like an answer for? Reach out to us for an in-depth consultation!
