Buying A Landed Home In Singapore: How Much Should You Earn to Afford a $3 Million Property?

1 April 2024 | BY

If you were to buy a $3million landed house in Singapore as a condo upgrader, your household will have to earn at least $19,827 per month.

how to afford a landed home

Buying a landed house in Singapore can be considered the ultimate flex. If you’re aspiring to be part of the 4.8% of resident households who live in a landed home, you’re likely upgrading from a condo.

After you’ve achieved the 5Cs–cash, car, credit card, condominium, and country club membership–the 5Bs are on the list. And to upgrade from your condo to a bungalow–or any type of landed property, really–you need to earn at least $19,827 to afford a $3M property. 

Note: We used $3 million as a benchmark as this seems like a feasible amount for condo upgraders who want to buy a larger space.

A quick search on PropertyGuru shows that for a $3M landed home, you can expect to buy a 3,000sqft cluster house or terraced house with about 60-75 years left on the lease. These homes are located in the OCR – think Serangoon North, Bartley, Marsiling, Pasir Ris neighbourhoods. Smaller homes of 2,000sqft in the Upper Thomson, Lentor, and East Coast areas are available too.

What is a landed property in Singapore?

landed home in singaporeImage credit: Freight Architects

In Singapore, a landed property refers to a home where you own both the house and the piece of ground it sits on. This is a bit different from condos or HDB flats, where your ownership is limited to the space within the walls of your home, but not the land. Landed homes can be terraced houses, semi-detached, detached houses or bungalows, and the crème de la crème, Good Class Bungalows.

Owning a landed property in land-scarce Singapore is a pretty big deal. It’s also seen as a bit of a status symbol, offering more privacy, space, and the freedom to make your place your own or own poultry. Here’s a summary of the different kind of landed homes available in Singapore:

Property Type Description
Bungalow Standalone house with its own land title and ample surrounding space.
Good Class Bungalow Upscale bungalow with a minimum land size of 1,400sqm, build-up restricted to 40% of land, up to two storeys, located in designated GCB areas.
Cluster House Landed properties in a gated community with shared facilities. Can include terrace houses, semi-detached houses, and bungalows.
Semi-Detached House Shares a wall with another house, each having its own land title. One half of a pair of houses.
Terrace House Shares walls with adjacent houses, each with its own land title, part of a row of at least three houses.
Shophouse Traditional building in heritage areas with commercial space on the ground floor and residential quarters above.
Strata-Titled Landed Homes situated on landed housing estates with joint ownership among owners. Monthly maintenance fees are typically required for communal area upkeep.

Can a foreigner buy a landed property in Singapore?

Yes, a foreigner can buy a landed property in Singapore, but there are restrictions and a specific approval process in place. The Singapore Land Authority (SLA) administers this process under the Residential Property Act.

What is the Residential Property Act?

The Residential Property Act (RPA) in Singapore is legislation designed to regulate foreign ownership of residential properties, ensuring that the local housing market remains accessible and affordable for Singaporeans. It restricts foreigners from purchasing landed residential properties without prior approval from the Singapore Land Authority (SLA). This includes detached houses, semi-detached houses, terraced houses, and vacant residential land. 

A notable exception under the RPA is Sentosa Cove, where the rules are slightly more relaxed, allowing foreigners to buy landed properties more freely, subject to approval. This area is designed to attract international investors and offers a residential enclave with a global appeal. 

Overall, the RPA plays a vital role in maintaining a balance between attracting foreign investment and safeguarding the interests of local residents in Singapore’s housing market.

If you’re a Singapore Permanent Resident or foreigner, you may be able to buy a landed home. You would have to:

  • Seek approval from the Singapore Land Authority (SLA) under the Residential Property Act
  • Be a Singapore Permanent Resident for at least 5 years
  • Have made an “exceptional economic contribution” to Singapore

What is the average price of a landed property in Singapore?

On average, you can expect to pay about $2.5M-$5M for a terrace house; $3M-$8M for a semi-detached house; and $5M-$15M for a bungalow. 

Prices for landed properties in Singapore have increased over the years. In part, the price growth is driven by the demand for this property type. Not only is there a limited supply of landed homes, but also you are paying a premium for land in this tiny concrete jungle. 

inside a landed home in singaporeImage credit: Comfort Home Interior

But transaction volumes have been dropping, resulting in price growth stabilising. According to the latest URA real estate figures for Q4 2023, the landed property price index has increased 4.6% quarter-on-quarter, and 8.0% year-on-year. Comparatively, landed home prices increased 9.6% in 2022.

But if you’re looking for the cheapest landed property in Singapore, you can find some starting from $600,000 in areas such as Simpang Bedok. However, these homes tend to be older leasehold terrace houses located in the Outside Central Region (OCR). As with all property types, the leasehold or freehold status, size, age, and location of the landed home affects its price.

How much do I need to earn to buy a landed property in Singapore?

To buy a $3M landed property in Singapore, you will need to earn a minimum gross household income of $19,827 per month

Assuming a 25-year loan tenure, the maximum LTV limit for your bank loan, and that you do not have any other debt obligations, here is the breakdown:

Financial Aspect Amount
Loan Amount $2,250,000
Downpayment $750,000
– Cash Component of Downpayment $150,000
Estimated Monthly Mortgage Repayment $10,905
Minimum Gross Household Income Required $19,827

The Total Debt Serving Ratio (TDSR)—which is the portion of your gross monthly income that can be used towards repaying all monthly debt obligations—is currently 55%. Here, the minimum gross household income required is derived by assuming you have no other debt obligations.

Of course, this is an ideal situation. If you’re buying a landed home, it’s safe to say you likely have a car and other financial commitments to pay off. So, you’ll likely need to earn more than the stated amount!

Financing your home purchase

how to afford a landed home in singaporeImage credit: TheSmartLocal

Buying your home is one thing, financing the purchase is another. Financing your property purchase is likely a decades-long commitment. In the above example, we assumed a fixed rate for 25 years. But in reality, interest rates fluctuate which is why you should keep an eye on the mortgage rate outlook.

Most floating rate bank loans are tied to an interest rate benchmark like SORA, which in turn is closely intertwined with global interest rate trends. So, if interest rates go up and you are on a floating rate home loan, you will have to pay more for your monthly mortgage repayment. Even if you are on a fixed rate home loan, you will be subject to floating rates once your lock-in period is over (which is why you should keep an eye out and refinance when you can).  

Currently, we are in a high interest rate environment; but there are signs that interest rates are coming down. However, despite the US Federal Reserve signalling at least three benchmark interest rate cuts, it is unlikely Singapore banks will lower their mortgage rates in 2024. Hence, you want to be prepared and be able to comfortably service your mortgage.

Additional costs to consider when buying a landed home

landed home in singapore

Other considerations you’ll need to have are if you have enough liquid cash to pay for Buyer’s Stamp Duty (BSD) and other property taxes, legal fees, home insurance premiums, and maintenance costs. Depending on your citizenship status and the number of properties owned, you may also have to pay Additional Buyer’s Stamp Duty (ABSD) fees

Assuming this is your only property and you are a Singaporean citizen, you will have to pay $119,600 in BSD for a $3 million home. Owner-occupier property tax rates will depend on the annual value of your property. On average, landed homes have an annual value of $30,000 so you are looking to pay at least $3,000 a year. Plus, legal fees for your property purchase start at $2,500, depending on the scope of work and who you engage. 

Having a bigger home translates to a larger utility bill and maintenance costs. You can expect to spend at least $500 monthly to run your home and keep it in good shape. Furnishing and renovating your home will likely set you back at least $150,000 too.  

Is it worth buying landed property in Singapore?

If you’re an aspiring private property upgrader, you already know that buying a landed home in Singapore is a huge financial commitment. The above figures are an estimate and serve as a guideline for your budgeting needs. As always, it’s good to over budget for your property purchase. 

Do consider you will also have to pay legal fees and Buyer’s Stamp Duty. Depending on your citizenship status and number of properties owned, you may also have to pay Additional Buyer’s Stamp Duty. You may also want to set aside some money for renovating your new dig too.

Check out our other housing guides:

Cover image credit: Freight Architects

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