The journey to owning a home in Singapore can sometimes be a daunting prospect for homebuyers, as newspapers or watercooler conversations highlight million-dollar Housing Development Board (HDB) homes, the escalating prices of suburban condominiums, and the ultra-rich buying up penthouses and good class bungalows. There can be an undercurrent of anxiety about what to expect, or the best approach to take.

To give Singaporeans an overview of the market options available today, Knight Frank Singapore charts the journey of a couple, Mandy and Andy, as they go through the various stages of housing transition.

Theirs might not represent everyone else's journey but remains relevant and offers insights into ballpark estimates of potential real estate options, and the corresponding amount of savings on top of cash-on-hand and income levels generally needed to navigate from one property to the next.

Applying for a BTO flat

To enjoy affordability, the couple books a 4-room unit of a newly launched BTO development in Sengkang, in line with their budget of S$315,000. They apply for an HDB loan that would finance the remaining purchased amount after deducting monies from their CPF Ordinary Account (OA) and the Enhanced Housing Grant of S$10,000.

Eligible to take a mortgage ranging from S$180,000 to S$210,000 at a prevailing interest rate of 2.6% per annum (p.a.), Andy and Mandy elect to loan 62% of the total cost price. And with 40% of their net income saved, they have sufficient cash and CPF savings to pay the downpayment up to 38% of the HDB BTO flat’s purchase price.

Exhibit 1

*At the point of key collection. Their combined income at the point of application was between S$8,001 and $8,500 to qualify for the EHG
**Before the property purchase

As the couple approaches the five-year Minimum Occupation Period on their BTO flat, their family has grown to include two children. To upgrade, they sell their flat for S$504,000 to finance their next property purchase, enjoying a 60% appreciation.  

Where will Andy and Mandy’s housing journey take them next? Find out next week!

All information provided are excerpts from Andy & Mandy: A Singaporean Housing Journey, a paper produced by Knight Frank Singapore’s Research department. This paper is subject to the following limiting conditions:

a) This paper proposes just one possible opinion in a wide range of possible housing scenarios and disclaims all responsibility and will accept no liability from any other party. 

b) Reproduction of this paper in any manner whatsoever in whole or in part or any reference to it in any published document, circular or statement without Knight Frank’s prior written approval of the form and context in which it may appear is prohibited.

c) References to any authority requirements and incentive schemes are made according to publicly available sources as at the date of writing of this paper. Technical and legal advice ought to be sought to obtain a fuller understanding of the requirements involved.

d) Projections or forecasts in the course of the paper are based on past quantitative trends and made to the best of the Knight Frank’s judgment at the time of report submission. However, Knight Frank disclaims any liability for these projections or forecasts as they pertain to future market conditions, which change due to unforeseen circumstances.

e) Knight Frank is not obliged to give testimony or to appear in Court with regard to this paper.

f) The statements, information and opinions expressed or provided are intended only as a possible guide to some of the important considerations that relate to the property market. Neither Knight Frank nor any person involved in the preparation of this report give any warranties as to the contents nor accept any contractual, tortuous or other form of liability for any consequences, loss or damage which may arise as a result of any person acting upon or using the statements, information or opinions in the paper.