Looking back, the COVID-19 pandemic had more than just an impact on Singapore’s public health. One of the most significant disruptions arising from the crisis were construction delays, which stalled HDB flat completion and created a shortage of homes. With supply unable to keep up with demand, more buyers turned to the resale market, and this applied further upward pressure on prices.

Since then, the resale HDB market has not looked back, exhibiting an unbroken upward trend that has seen prices rise consistently for 22 straight quarters as of 1Q 2025.

While this status quo is expected to continue in the near term, price growth could moderate this year. In 2Q 2024, the HDB resale price index was 187.9. This index rose to 202.8 in 2Q 2025. It was projected that this index would increase at a gentler pace of 3 – 6% year-on-year (y-o-y) in 2025. Additionally, the number of million-dollar flats rose from 419 transactions in 1H 2024 to 763 transactions in 1H 2025.

On the supply side, HDB has launched over 5,000 new Build-to-Order (BTO) flats, as well as another 5,590 Sale of Balance Flats (SBF) in February 2025’s BTO exercise. HDB plans to release a further 19,600 units this year. Not only will this incoming supply provide flat buyers with a more affordable option, but it may also put downward pressure on existing resale prices.

In 2H 2024, the average price of 4- and 5-room flats experienced a consistent overall increase, along with a notable rise in the number of transactions valued at a million dollars or more. Although this might seem intimidating, another way to understand it is that for every million-dollar flat sold, approximately 43 other flats were sold at lower prices. 2H 2024 also saw the general price growth of 4- and 5-room flats remain stable.

Table 1: 1H 2024 vs 1H 2025 HDB Resale Comparison

The number of flats transacted at $1 million and above in 1H 2025 accounts for only 4.3% of all transacted flats, meaning that the other 95.7% of flats were transacted below the million-dollar mark.

However, amid these market shifts, one question remains: Are there still affordable flats available now, especially 4-room and 5-room units? The answer is “yes” – and here’s where they can be found.

Affordable 4 Room Flats

The lowest-priced 4-room flat in 1H 2025 was in Tampines, costing $300,000. Of the 4-room flats transacted in 1H-2025 (5,628 transactions), 3,555 were below the average price of $670,000, making up 63.2% of all 4-room flat transactions.

The table below shows the towns with the lowest average price transacted for a 4-room flat.

Table 2: Towns with the lowest transacted average price for a 4 Room Flat in 1H 2025

Reflecting on our findings in 1H 2024, most of the affordable 4-room flats still appear in satellite towns within non-mature estates. This is because there are more HDB estates in these areas, and homes here are usually sold at lower prices than those nearer the Central Region, due to the high demand for housing closer to the centre.

If the size of your home is a major factor in your purchase, most older flats in these areas tend to be larger, especially those built in the 80s and 90s. Woodlands and Yishun feature jumbo flats, which are essentially unsold 3- and 4-room flats combined to create larger units. These units range from 147 to 199 square metres and provide a more spacious living area. This offers buyers greater value for money. However, you might miss out on a potentially longer lease as HDB has stopped building these flats since the 90s.

In 1H 2024, we observed that most 4-room flats sold for under $650k had a remaining lease of 15 years or less. A breakdown of 4-room flats sold in 1H 2025 below the average price of $670,000 showed that the shortest lease among sold flats was 44 years, and most of these flats had between 36 and 45 years remaining.

Chart 1: Breakdown of 4-room resale HDB flats sold for under $669,000 in 2H 2024 by flat age

Affordable 5 Room Flats

Moving on to affordable 5-room flats, data collected showed that Jurong East had the lowest transacted price for a 5-room flat in 1H 2025, with a price tag of $445,000 ($398 psf). Although this may seem appealing at first glance, the remaining lease on this unit was just over 50 years, suggesting that its age may have influenced the price.

The total number of transactions below the average price of a 5-room flat ($775,000) was 1,836 transactions. This accounts for 61.1% of all 5-room transactions (3,005 transactions) in the first half of 2025, which essentially means that the majority of 5-room flats transacted in this period are considered “affordable”. Below are the towns offering the lowest prices for 5-room homes:

Table 3: Towns with the lowest transacted average price for a 5 Room Flat in 1H 2025

Again, we observe that the top 5 towns with the lowest average transacted price of 5-room units are in non-mature estates. This may be because, generally, estates like Woodlands and Sembawang are newer and have more land available. The high land supply keeps the prices of these units lower.

Newer estates often lack amenities, requiring residents to travel further for essential necessities. This can be inconvenient, especially for older residents. Consequently, it discourages buyers from opting for more accessible areas with better amenities, which are usually found in mature estates.

Unlike non-mature estates, mature estates like Queenstown and Ang Mo Kio provide accessibility and a wide range of amenities that are usually within 10 minutes of a resident’s home, which is why the demand for these homes is so high.

Although these affordable flats are generally located further from the Central Region, their lease prices are usually higher compared to those in mature estates or closer to the Central Region. Flats in non-mature estates are newer, allowing buyers to see the long-term value of their purchase as more amenities and transport facilities are added over time. Additionally, towns such as Jurong West and Sembawang typically offer larger flats compared to other newer estates, making them appealing to families seeking spacious yet affordable options.

Chart 2: Breakdown of 5-room resale HDB flats sold for under $775,000 in 2H 2024 by flat age

Ultimately, this means that flats are largely still affordable for Singaporeans.

If you are currently searching for an affordable resale flat, starting with non-mature estates is a good first step. With fewer amenities and developments, there is a decent supply of flats with lower demand, which could be priced within your budget.

However, if location is fairly important for your home, there are several flats nearer the central area within older estates that have fewer years remaining on their leases.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

Punggol was developed over the two decades and is emerging as a choice location for many homeowners. In the next decade or so, we can almost visualise how Tengah will be evolving and mirroring the growth of the Punggol estate.

In 1996, the blueprint for Punggol 21 was unveiled to develop Punggol as a Waterfront Town of the 21^st century. Today, it is a vibrant residential town home to an HDB resident population of 187,800, as well as the Punggol Digital District and the Singapore Institute of Technology. Tengah may undergo a similar transformation.

Both towns were developed off greenfield sites. Homes were built to support commercial and industrial hubs – Punggol Digital District and Jurong Innovation District for Punggol and Tengah respectively. Additionally, universities were located near these towns to foster stronger industrial-academia collaborations between these nodes. Furthermore, both towns have reliable public transport nodes within their towns, with the Punggol LRT and the Jurong Region Line serving residents.

One difference is that Punggol is located in the North-East Region, while Tengah is in the West Region. Following the announcement of the development of Tengah, could we potentially see Tengah mirroring the growth of Punggol?

This piece will talk about what Tengah currently offers and future plans for this new forest town.

 

Tengah – the 24^th and latest HDB town

Tengah is located within the West Region of Singapore. It is bordered by Bukit Batok to the east, Chua Chu Kang and Bukit Panjang to the north-east, Western Water Catchment to the north and west, and Jurong East and Jurong West to the south.

Image 1: Developed New Township of Tengah

Source: ERA Research and Market Intelligence

HDB first announced the development of Tengah town in 2016. Billed as a “forest town”, the estate will span nearly 700 hectares. It is similar to the size of Bishan and will house nearly 42,000 new homes when fully developed. Homes in Tengah will be located across five districts, each with their own unique character.

What sets Tengah apart is that it will be the first sustainable housing town in Singapore. The estate is set to boost smart technologies and eco-friendly features, driving Singapore’s commitment to meet our sustainability targets.

The Tengah town centre, which will be known as The Market Place, will be within the Park District. It will be Singapore’s first “car-free” Town Centre where the roads will run beneath the Town Centre, freeing up space at the ground level for shopping and recreational uses. As such, walking and cycling are the encouraged modes of transport within the estate. Tengah MRT Station on the future Jurong Region Line (JRL) will be located there. Other features include the Central Park, Rainforest Walk and a plethora of retail and dining services.

 

Image 2: Map of Districts in Tengah

Source: Google Maps, ERA Research and Market Intelligence

 

Amenities and Connectivity

The completion of the first 10,000 HDB flats in Tengah in 2023 marked a major milestone for the new town, drawing in its first wave of residents. However, early hurdles quickly emerged with residents facing a lack of amenities and transport options.

Since then, Tengah’s first Neighbourhood Centre, Plantation Plaza, has been completed. Located within Plantation District, which will have 10,000 new homes when fully completed, it will serve the daily needs of residents.  It houses a wide variety of dining, retail, healthcare and recreational services.

 

Image 3: Plantation Plaza Shopping Mall in Tengah

Source: HDB

 

As the residential population in Tengah is still relatively small, there are currently only a few schools in the area. However, it was announced by the MOE that new schools will be set up in newer estates such as Tengah and Punggol. Schools within Tengah includes Pioneer Primary School, Anglo-Chinese School (Primary), and Bukit View Primary School.

With Tengah planned as a car-lite town, more transport nodes have been planned in comparison to other towns. There will be four MRT stations on the upcoming Jurong Region Line (JRL). These stations are slated to start operations in phases between 2027 and 2028. Additionally, the Brickland District will be served by Brickland MRT Station (NS3A) on the North South line. The station is aimed to be completed by 2034.

In terms of bus connectivity, Tengah currently has a bus interchange with 5 services connecting commuters to parts of Jurong and Bukit Batok. By the end of 2025, it was announced that there would be two new bus services introduced, and six more by 2026. Most bus stops in Tengah will be within 300 metres of residential estates.

 

Image 4: Map of stations on Jurong Region Line serving Tengah

Source: HDB, ERA Research and Market Intelligence

With these MRT stations, residents would be three stations away from Jurong East MRT and Chua Chu Kang MRT, which serves the East West and North South Lines respectively, enhancing connectivity throughout the island.

 

Jurong Innovation District

The Jurong Innovation District (JID) is a 620-hectare industrial district is home to advanced manufacturing, supporting an ecosystem of manufacturers, technology providers, researchers and education institutions with Nanyang Technological University nearby. It is located around 14 minutes away from Tengah by car. When the Jurong Region Line is completed, connectivity between the places will be improved with the JID being served by Corporation Station (JS5) on the line. It will be one stop away from Hong Kah MRT station.

 

Image 6: Artist Impression of the future Jurong Innovation District

Source: JTC, ERA Research and Market Intelligence

When completed, the JID is expected to introduce about 95,000 new jobs in advanced manufacturing, innovation and research. Individuals working in this district or industry could look at housing in Tengah, as it is a short distance away from JID, as well as the Jurong Lake District, which contributes 100,000 more jobs. Furthermore, housing in Tengah is likely to be affordable to attract more Singaporeans to the new town.

According to the URA Master Plan, Tengah has several plots of land zoned for commercial use, including a recent GLS site which is zoned for commercial and residential use. This could further boost the number of jobs available within this district.

 

What’s next for Tengah

Currently, there are no new private condominium developments in Tengah planning area. As of June 2025, there have been four EC launches and 22,521 HDB units launched across 20 BTO estates in Tengah. Six BTO estates are yet to be completed with the latest slated to be completed by 2Q 2027.

Table 2: Details of Projects in and around Tengah

Source: URA as of 1 July 2025, ERA Research and Market Intelligence

The first private condominium GLS site was awarded in January 2025 along Tengah Garden Avenue. The site was tendered at $821 per square foot per plot ratio (psf ppr) and can yield around 800 units. It is located conveniently next to the future Hong Kah MRT station. It is expected to launch in 2026 and be completed by 2030.

 

In Closing

Tengah reflects many similarities to the early days of Punggol. They were both developed from the ground up, supported by strong intra-connectivity, and developed near innovation hubs. However, Tengah has some elements of uniqueness, having a strong focus on sustainability, smart living, as well as being home to Singapore’s first car free town centre.

One key difference between both towns – Tengah’s flats have a height restriction due to its proximity to Tengah Air Base. While Tengah may not replicate Punggol’s scale or waterfront appeal, it is positioned to achieve similar or greater success in terms of liveability, sustainability, and job opportunities. With a strong emphasis on sustainability in its planning, as well as being strategically located to the future Jurong Innovation Hub which will provide jobs, it has a strong foundation set for long term growth.

Are you interested to live in an up-and-coming estate that will see major transformations in the years to come? If so, Tengah is a place that you can call home. There is another upcoming EC launch in 2025. Interested to know more? Speak to any ERA Trusted Advisor today to find out more!

 

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

Bukit Timah is traditionally known to be a prime residential area consisting predominantly luxury private condominiums and landed homes, as well as being located near the Core Central Region (CCR). But this could soon change over the next 20 to 30 years.

So you see, the Urban Redevelopment Authority (URA) and the Housing & Development Board (HDB) has announced a development plan on May 2024 that will see the Bukit Timah Turf City being redeveloped into a new residential estate.

More importantly, Bukit Timah will see the inclusion of Build-to-Order (BTO) flats for the first time in almost 40 years!

Here is what you need to know about this upcoming estate.

Bukit Timah Turf City had a colourful past

Spanning 176 ha, Bukit Timah Turf City was  once an area dedicated to sports and recreational activities, and most notably horse racing. Known formerly as the ‘Singapore Turf Club’, the site was used for horseracing from 1933 to 1999, and was a popular haunt for avid punters for over 66 years,

According to the Minister of National Development Desmond Lee, “the site was zoned for residential use since 1998, but was leased out for lifestyle and recreational use until the end of 2023”.

Since then, Bukit Timah Turf City has been home to a several sports associations such as a saddle club, country clubs, commercial spaces, and other sporting facilities.

When the Singapore Turf Club shifted to Kranji, the site transformed into a shopping complex serving the immediate residents of the private residential enclave.

Why the Need to Redevelop Turf City?

Currently, the piece of land that was once home to Singapore Turf Club is not being utilised well, and has a high redevelopment potential to make the area lively like it once was. Additionally, Bukit Timah is made up predominantly of private residential properties, available only to a select few, which has cultivated the area’s reputation as a prestigious neighbourhood for the wealthy.

Thus, through integrating public and private housing in the upcoming housing estates, this will foster inclusivity among people of different financial background and help breakdown any stereotypes of the area. Furthermore, those working or schooling in the area would be interested in affordable properties that are conveniently located in an esteemed neighbourhood.

Diversify housing options in Bukit Timah

This area, together with the rest of Bukit Timah, is widely perceived as exclusive due to the surplus of private residential properties there, and its central and accessible geographical location.

Therefore, a greater diversity of housing types would be beneficial to a wider group of people who are looking to live in a centrical location nearer to their workplaces, schools and the CCR. Furthermore, by introducing public housing in this area, it will allow children from diverse backgrounds to attend popular schools in the area.

Better amenities and connectivity

Bukit Timah Turf City’s rich history can be seen in the many buildings and structures that represent the former Turf Club’s distinct aspects, and will be studied for retention and repurposing to integrated it with the new residential enclaves in the future.

Other amenities will include recreational spaces and sports facilities, that will bring convenience to users and at the same time, showcasing the area’s distinct past. The new neighbourhood will be built around the former grandstand and the current oval shaped open space will be retained for recreational purposes.

As for transport nodes, Bukit Timah Turf City currently has no bus services, and the nearest MRT station is Sixth Avenue. Therefore, improving the connectivity of Bukit Timah Turf City with new bus services and MRT lines would benefit both new and existing residences living in that area.

What Can We Expect with the Upcoming Estate

Bukit Timah Turf City is expected to yield 15,000 to 20,000 residential homes, both private and public, across four distinct neighbourhoods, namely Racecourse Neighbourhood, Stables Commune, Saddle Club Knolls and Tinggi Hills.

To cater to the needs of future residents, these neighbourhoods will feature open public spaces integrated with historic buildings and structures, a variety of amenities including shops, community and recreational facilities, as well as improved transport connections.

Additionally, the Bukit Timah Turf City is planned to be car-lite, pedestrian friendly and well-served by public transport. Due to this, there will be fewer spaces dedicated to car parking to free up space for more greenery and community spaces.

Improved connectivity

The area is currently served by Sixth Avenue MRT Station on the Downtown Line (DTL), which is 15 minutes away from the site. By 2032, Turf City will have its own MRT station on the upcoming Cross Island MRT Line. Residents will be within a 10-minute walk from either MRT station, increasing convenience and connectivity between Bukit Timah Turf City and the rest of the island, without the need for a private vehicle.

Furthermore, new bus services may also be added to allow future residents to have more choices when travelling within and outside the Bukit Timah Turf City estate.

Road improvement works will also be carried out along Dunearn Road, Bukit Timah Road and Eng Neo Avenue to accommodate anticipated traffic to and from future developments at Bukit Timah Turf City. Concurrently, a study is being conducted on the technical feasibility and impact of implementing a new exit ramp from the Pan Island Expressway (PIE) towards Tuas at Bukit Timah Turf City.

BTO flats in Bukit Timah could be a’ golden ticket’ to enter popular schools

After almost 40 years, URA and HDB has announced that HDB flats will be included in this area. The inclusion of HDB flats aims to provide a more affordable housing option for Singaporeans who wish to live in this area.

Existing HDB flats are older and area limited in supply

For HDB buyers looking to stay at Bukit Timah, their only option will be the flats at Toh Yi Gardens estate. With an estimated 2,555 HDB flats in Bukit Timah which were built in 1988, HDB flats in Bukit Timah Turf City will definitely be of high demand, given the area’s prestigious and convenience, as well as the presence of several notable schools in the area.

Parents with young kids will also be eyeing future properties in Bukit Timah Turf City in hopes of securing a placement in popular schools in the vicinity.

Looking at OneMap, assuming there are BTO flats located on the former Grandstand, they could potentially fall within 1-2km radius of popular schools like Methodist Girls’ School, Pei Hwa Presbyterian Primary School, and Raffles Girls’ Primary School.

In Closing

Once deemed as a place that is out of reach for most Singaporeans to live in, the upcoming HDB flats in Bukit Timah Turf City will provide a more diverse living community in Singapore. Both current and new residents will benefit from the new amenities, especially the improved connectivity to the rest of the island via public transport links. “Un-priming” the area can bring about a more equitable community.

That said, existing residents may be may expose to some inconvenience from the upcoming construction works. Regardless of that, existing residents will benefit from the future development in the vicinity.

So, would you consider making Bukit Timah Turf City your next home?

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval. 

For almost anyone doing it for the first time, buying a home in Singapore can be a confusing process. Throw in a bunch of acronyms, like ABSD (Additional Buyer’s Stamp Duty) and MOP (Minimum Occupation Period), and things can get baffling real quick. However, if you’re intending to take out a loan on a new home purchase, two terms that you’ll absolutely need to know are TDSR and MSR.

In their full form, TDSR stands for ‘Total Debt Servicing Ratio’, whereas MSR means ‘Mortgage Servicing Ratio’, and they’re both Government initiatives to promote responsible borrowing. Below, we explain how TDSR and MSR came about, their purpose, and how to determine your housing affordability using both ratios.

What exactly are TDSR and MSR? And how did they come to be?

Introduced by the Monetary Authority of Singapore (MAS) in 2013, the TDSR is a framework applying to all property loans extended by banks to borrowers. Its rollout is to promote prudency amongst individuals taking loans, so that they don’t end up borrowing more than they could afford.

Therefore, the TDSR, which limits debt repayments to a certain percentage of gross monthly income, is first and foremost a safety net. When the TDSR was first introduced in 2013, borrowers were allowed to spend up to 60% of their gross monthly income on loan servicing.

Subsequently, that limit was tightened to 55% in 2021. Put differently, this means that under TDSR guidelines, a borrower should have a total debt value of under 55% of his or her monthly salary to be able to take out a mortgage.

Similarly, for the MSR, it places a cap on the percentage of monthly income that borrowers can use for mortgage repayments. In 2013, the MSR threshold was set at 30% for HDB flat purchases that are financed by bank loans, and it has stayed that way since.

How are TDSR and MSR applied differently for home purchases?

If there’s a key difference between TDSR and MSR that’s worth highlighting, it’s that TDSR applies to all types of housing loans, whereas MSR applies only to loans for buying an HDB flat OR an Executive Condominium (EC) that still hasn’t completed its MOP.

Hence, supposing that you’re a homebuyer who wishes to take out a home loan for an HDB flat or EC purchase, you’ll have to comply with both the MSR and TDSR limits. The differences of both ratios are summarised in the table below.

Table 1: Summary of the differences between TDSR and MSR

	TDSR	MSR
Definition	Refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for	Refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for
Properties that this loan applies to	All property types	HDB flats and ECs only
Threshold	55% of borrower’s gross monthly income	30% of borrower’s gross monthly income
Debt Obligations included	All debt obligations (e.g. Car loans, student loans)	Only property loans (Including the one being applied for)
How it is calculated	TDSR = (Total monthly debt)/(Gross monthly income) x 100%	MSR = (Total monthly mortgage repayment(s))/(Gross monthly income)  x 100%

It’s also worth bringing up (again) that both TDSR and MSR account for different financial considerations. TDSR factors in all of a borrower’s unsettled debt, including loans taken out for housing, cars, education, credit cards, and so forth.

In comparison, MSR is more straightforward as it’s solely calculated on a borrower’s monthly income. For borrowers buying an HDB or EC unit, their household monthly income will first be assessed using the MSR on their loan quantum to calculate the maximum amount they can repay monthly.

Thereafter, buyers will be further subject to a second round of assessment, which will consider all their debt repayments are within the TDSR limits. Should the borrowers have outstanding debts such as car loans, it may affect the amount they borrow and they may not get the maximum MSR loan amount.

How do you calculate MSR based on your household income?

In general, a borrower’s MSR can be derived by dividing their total monthly mortgage repayments by their gross monthly household income.

Assuming Party A has a gross monthly income of $10,000, his MSR calculations would be so…

$10,000 x 30% = $3,000

In another scenario, if Party A has an existing debt of $4,000 and a gross monthly income of $10,000, his MSR calculations would be so…

Maximum MSR loan amount = $10,000 x 30% = $3,000

Maximum TDSR loan amount = $10,000 x 55% = $5,500

Maximum MSR loan amount that can be taken to meet TDSR limit = $5,500 – $4,000 (Existing debt) = $1,500

In other words, even though Party A’s maximum mortgage affordability is $3,000 (based on the current MSR threshold of 30%), their existing debt of $4,000 limits their borrowing capacity to just $1,500.

To gauge the estimated loan quantum a household can secure based on MSR, one can refer to the sensitivity analysis table below. With a monthly household income of $16,000, a family can afford a home of up to $1.01mil, which works out to the price of a 2-room condo in the OCR.

Table 2: MSR Sensitivity Analysis- Based on Value Of Property on Household Income and Mortgage Rates for a 25 Year Loan

		Interest Rates
Household Income	Monthly Payment	3.00%	3.50%	4.00%	4.50%
$10,000	$3,000	$633,000	$600,000	$569,000	$540,000
$11,000	$3,300	$696,000	$660,000	$626,000	$594,000
$12,000	$3,600	$760,000	$720,000	$683,000	$648,000
$13,000	$3,900	$823,000	$780,000	$739,000	$702,000
$14,000	$4,200	$886,000	$839,000	$796,000	$756,000
$15,000	$4,500	$949,000	$899,000	$853,000	$810,000
$16,000	$4,800	$1,013,000	$959,000	$910,000	$864,000
$17,000	$5,100	$1,076,000	$1,019,000	$967,000	$918,000
$18,000	$5,400	$1,139,000	$1,079,000	$1,024,000	$972,000
$19,000	$5,700	$1,202,000	$1,139,000	$1,080,000	$1,026,000
$20,000	$6,000	$1,266,000	$1,199,000	$1,137,000	$1,080,000

Source: ERA Research and Market Intelligence (*Rounded to the nearest thousand)

How do you calculate TDSR?

Similar to MSR, it’s possible to derive a borrower’s TDSR with the help of a formula, which is as follows…

So, for instance, if Party B earns a fixed income of $10,000 a month and owes $2,000 in car loans as well as $1,000 in credit card loans, their maximum remaining capacity for monthly mortgage payments, based on the current TDSR threshold of 55%, would be…

Maximum loan based on TDSR limits = $10,000 X 55% = $5,500

Maximum remaining borrowing capacity = $5,500 – car loan ($2,000) – credit card loan ($1,000) = $2,500

However, if a borrower’s income varies from month to month, their TDSR can be slightly trickier to calculate. And that’s because they’re only permitted to use 70% of their gross monthly income for TSDR calculations. Or as MAS puts it: “financial institutions are required to apply a haircut of at least 30% to all variable income (e.g. bonuses) and rental income”.

Therefore, if we’ve Party C who has a similar debt situation as Party B, along with a gross monthly income of $10,000 – consisting of a fixed component of $7,000 and $3,000 in commissions – their TDSR calculations will look like this…

Maximum loan based on TDSR limits = [$7,000 + ($3,000 X 70%)] X 55% = $5,005

Maximum remaining borrowing capacity: $5,005 – car loan ($2,000) – credit card loan ($1,000) = $2,005

To gauge the estimated loan quantum a household can secure based on TDSR, we can refer to the sensitivity analysis table below. Under TDSR, a family earning a monthly household income of $16,000 can purchase a home of up to $2.4mil which is a rough cost for a sizable 3-bedroom OCR condo presently.

Table 3: TDSR Sensitivity Analysis– Max Value of property value based on household income and mortgage rates for a 25 Year Loan

	Interest Rates
Household Income	Monthly Payment	3.00%	3.50%	4.00%	4.50%
$10,000	$5,500	$1,547,000	$1,465,000	$1,390,000	$1,320,000
$11,000	$6,050	$1,702,000	$1,612,000	$1,529,000	$1,452,000
$12,000	$6,600	$1,856,000	$1,758,000	$1,668,000	$1,584,000
$13,000	$7,150	$2,011,000	$1,905,000	$1,807,000	$1,716,000
$14,000	$7,700	$2,165,000	$2,051,000	$1,946,000	$1,848,000
$15,000	$8,250	$2,320,000	$2,198,000	$2,084,000	$1,980,000
$16,000	$8,800	$2,475,000	$2,344,000	$2,223,000	$2,111,000
$17,000	$9,350	$2,629,000	$2,491,000	$2,362,000	$2,243,000
$18,000	$9,900	$2,784,000	$2,637,000	$2,501,000	$2,375,000
$19,000	$10,450	$2,939,000	$2,784,000	$2,640,000	$2,507,000
$20,000	$11,000	$3,093,000	$2,930,000	$2,779,000	$2,639,000

Source: ERA Research and Market Intelligence (*Rounded to the nearest thousand)

Scenarios where the TDSR Ratio is not applied

Although it’s safe to say that TDSR and MSR will almost certainly be applied to the majority of home loan calculations, there are certain scenarios where borrowers can be exempted from TDSR rules too. For example, TDSR is currently waived for owner-occupiers when they refinance their housing loans. Likewise, bridging loans where the outstanding balance will be repaid within 6 months are also exempted from TDSR rules.

The same applies to mortgage equity withdrawal loans too, provided the Loan-to-Value ratio, combined with any other loans secured against the same property, does not exceed 50%. Lastly, another important term to know is the Loan-to-Value ratio.

Loan-to-Value Ratio

The LTV ratio is the percentage of the property value an individual is allowed to borrow to finance their home mortgage. Implemented by the government, this ratio serves to limit how much money can be borrowed by individuals to ensure the borrower is able to repay all their loans and not over-leverage.

The LTV limit for an individual with no existing housing loans is capped at either 75% or 55%, with a minimum cash down payment of 5% or 10% respectively. The table below will delineate the differences in LTV limits based on the number of outstanding housing loans.

Table 4: LTV Limits Applied based on Outstanding housing loans

Number of Outstanding Housing Loans	LTV Limit	Minimum Cash Down Payment
0	75% or 55%	5% (for 75% LTV) or 10% (for 55% LTV)
1	45% or 25%	25%
2 or more	35% or 15%	25%

Source: MAS, ERA Research and Market Intelligence

The lower LTV limit should be applied if the loan tenure exceeds 30 years, or 25 years for HDB flats, or if the loan period extends beyond the borrower’s age of 65 years. For HDBs, the maximum loan an individual can take to finance their flat has been tightened.

With effect from 20 August 2024, the Loan-to-Value (LTV) limit for HDB loans will be lowered from 80% to 75%, akin to mortgage loans granted by financial institutions. The revised HDB LTV limit will apply to complete resale applications received by HDB on or after 20 August 2024.

A complete resale application is one where HDB has received both the sellers’ and buyers’ portions of the application. For applicants who were successful in the June BTO exercise, the LTV limit for their housing loans will not be affected and will remain at 80%.

Keen to learn more about how this applies to your homebuying journey? Or about TDSR and MSR in general? Feel free to speak to an ERA Trusted Adviser today!

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval. 

Following the recent submission and closure of a joint bid in March this year, we will be seeing five major real estate players — CapitaLand Development, City Developments, Frasers Property, Mitsubishi Estate and Mitsui Fudosan (Asia) – joining hands to drive a singular visionary goal for Singapore. 

That is to propel the development of the Jurong Lake District over the next two decades – bringing it one step closer to becoming the nation’s next largest business hub outside Central Singapore. 

This undertaking is by no means an easy feat, but it is well within reach of a consortium whose members have played pivotal roles in shaping Singapore’s landscape amidst shifting demands. 

Today, the evolving needs of businesses and consumers have translated into new requirements, whereby the prevalence of hybrid work, omnichannel retail and a focus on sustainability are expected to shape the JLD’s future as well as that of its properties. 

Late last year, the market witnessed the successful launch of J’den – a mixed-use development in the heart of the Jurong Lake District. Buyers snapped up 88% of available units on launch day, with an average price of $2,451 per square foot (psf) thus setting an unprecedented benchmark for new launches in the West. 

With this notch in its belt and status as a regional centre, perhaps Jurong could make the West side the best side – not unlike its counterpart in the East, Tampines. 

Tampines’s emergence as a regional centre  

Tracing all the way back to the early 1990’s, Tampines emergence as a regional centre first arose from the Government’s plans to decentralise economic activity, driving business and growth from the Central Business District (CBD) to other areas in Singapore.  

This was primarily achieved by constructing homes, offices, transport networks and shopping malls – interspersed throughout Tampines to uplift its vibrancy as an urban hotspot for corporations and workers alike.  

In the present day, Tampines is now a thriving town with no fewer than three shopping centres, namely Tampines Mall, Tampines 1, and Century Square. On the commercial front, Tampines is also within distance of key employment gateways, such as Tampines Regional Centre, Changi Business Park, and Changi Airport. 

Furthermore, with the inclusion of Our Tampines Hub in 2017, an integrated community and lifestyle centre, Tampines is on the right track to becoming a compelling live-work-and-play destination in the East, transcending its former identity as a quiet commune in the 1980s.

Foretelling Jurong’s future through present-day Tampines 

Keeping pace with Tampines’s transformation into a mature town, property prices in the neighbourhood have also grown across the years. 

Over the last two decades, resale HDB prices have shown exponential growth, increasing by more than two-fold from an average price of $243 per square foot (PSF) in 2004 to $575 PSF in 1Q 2024. Similarly, non-landed private homes in Tampines more than tripled in price, growing from an average of $450 PSF in 2004 to $1,532 in 1Q 2024. 

Chart 1: Average Home Prices in Tampines Versus OCR Non-Landed Home Prices

Additionally, the increase in resale HDB prices for Tampines has closely mirrored that of the national average, having risen by 32.4% since 2014 – a growth rate comparable to the 33.9% uptick exhibited by the HDB Resale Price Index. 

The growth of private home prices in Tampines also outpaced that of non-landed properties in the Outside Central Region (OCR), with both respectively increasing by 240.4% and 198.7% since 2004. 

Table 1: Growth in Property Prices since 2004 

Accordingly, the sustained price growth and demand for Tampines homes can be attributed to a number of driving factors – which Jurong also shares:

1. Tampines and Jurong are close to key business clusters 

For starters, Tampines is located in close proximity to prominent business and heavy industrial hubs, such as Changi Business Park and Tampines Industrial Park, which in turn function as the hub of operations for major businesses.

Big names that have chosen to plant their roots at these locations include:

• Hitachi High-Tech
• OCBC Bank
• Standard Chartered Bank
• Government agencies (Central Provident Fund Board, Housing and Development Board)

Additionally, Tampines is home to a wafer fab park that houses businesses specialising in semiconductor and electronic component production, such as Jabil Circuit and Hoya Electronics.

Brought in by the Economic Development Board, the entry of these firms has led to the creation of approximately 1,200 jobs as of 2023, with 1,000 of them located at Tampines Wafer Park alone.

In comparison, Jurong is conveniently located between two of Singapore’s prominent business hubs, namely one-north and Tuas.

The former is home to major tech firms, like Grab, Google and Shopee, whereas the latter is where industrial companies, like Norwegian paint manufacturing business Jotun and American oil service company Haliburton, are located.

There is also the Tuas Biomedical Park in the vicinity. Alone, it accounts for nearly 7,000 jobs in Jurong, owing to the fact that it houses facilities for global pharmaceutical companies like Abbott Manufacturing, Pfizer Asia Pacific, and MSD International.

2. Tampines and Jurong both have reputable schools 

Further contributing to housing demand in Tampines is the presence of reputable educational institutes, including Poi Ching School, Chongzheng Primary School, St. Hilda’s Primary School and Temasek Polytechnic – ideal options for young families interested in moving into the neighbourhood.

In the same vein, families with school-going children are likely to find Jurong attractive, thanks to learning institutions like Rulang Primary School, Westwood Primary School, and Jurong Primary School in the vicinity.

The West is also home to world-renowned tertiary institutions, such as Singapore Polytechnic, the National University of Singapore (NUS), and Nanyang Technological University (NTU).

3. Tampines and Jurong are amongst the biggest towns in Singapore

It is also worth noting that Tampines is the third largest township in Singapore, housing some 94,000 HDB flats and non-landed private homes; this is a critical mass of housing that translates into substantial transaction volumes, which in turn drives organic price growth.

Likewise, Jurong houses over 110,000 HDB flats and non-landed homes; this too equates to a fairly significant population density and thus points to the likelihood of healthy transaction activity.

As for retail and entertainment options, Jurong offers a diverse selection of malls, including the popular Jurong Point, Westgate, JEM, and IMM. 

So, will the future Jurong make the West side the best side? 

Distance apart notwithstanding, both Tampines and Jurong clearly demonstrate how a combination of factors – proximity to key business hubs, job creation, credible schools, substantial populations, and perhaps most crucially, future plans for urban development (specifically those involving the Jurong Lake District) – can fuel the popularity of residential towns. 

Hence, given the right qualities, it is possible for any prime location in Singapore, not just Jurong and Tampines, to showcase their region’s best side. 

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.