Key Takeaways
- Housing affordability challenges intensified in 2025, with million-dollar HDB flats becoming increasingly common and private property prices continuing their upward climb
- While mortgage rates declined modestly and government supply increased, the pace of price growth has outstripped income gains, pushing affordability to historical limits
- Singapore ranked 17th globally in housing affordability, but the median multiple of 4.2 still places the city-state in the “seriously unaffordable” category
- Experts predict modest price increases will continue in 2026, with affordability improvements likely to be gradual and uneven across different market segments
Those hoping for significant housing affordability improvements in 2025 found themselves disappointed, as both public and private property markets continued to test the financial limits of buyers across all income brackets. From million-dollar HDB flats becoming commonplace to private condominiums pushing further beyond reach, the year reinforced Singapore’s status as one of the world’s most expensive housing markets.
Why This Matters for You
Housing costs directly impact household budgets, retirement planning, and wealth accumulation for Singaporeans. When affordability remains constrained, fewer people can achieve homeownership, limiting wealth-building opportunities particularly for younger households. These dynamics also influence consumer spending, business growth, and the broader economic landscape.
“After years of declining affordability, we’re now on a path where affordability slowly improves, not through dramatic price corrections, but through an extended period of flat-to-modest price growth, rising incomes, and gradually falling interest rates,” noted property analysts. However, this gradual improvement offers little immediate relief to house hunters on the sidelines.
The Million-Dollar HDB Phenomenon Accelerates
One of the most striking developments in 2025 was the surge in million-dollar HDB resale transactions. Over 1,500 public housing flats sold for at least $1 million throughout the year, representing a nearly 50% increase from the 1,035 units in 2024. By September alone, a record 172 million-dollar flats changed hands in a single month, accounting for 7.9% of all resale transactions.
These eye-watering figures were concentrated in mature estates with excellent connectivity and amenities. Toa Payoh led with 37 million-dollar transactions in September, followed by Queenstown and Bukit Merah with 18 each. The phenomenon even spread to non-mature estates, with a Woodlands executive flat fetching $1.12 million, signaling that premium demand was expanding beyond traditional city-center locations.
The highest recorded transaction was a five-room flat at SkyTerrace @ Dawson in Queenstown, which sold for $1.659 million in June with approximately 90 years remaining on its lease. Other top deals included a five-room flat and executive maisonette in Bishan selling for $1.632 million and $1.6 million respectively, as well as units at The Pinnacle @ Duxton commanding similar prices.
Despite these headline-grabbing figures, the average price of million-dollar flats in 2025 was approximately $1.14 million, only 1.8% higher than 2024, indicating most deals clustered at the lower end of the spectrum. Nevertheless, these transactions represented just 6.4% of total resale applications, highlighting that while prominent, million-dollar flats remain a small segment of the overall market.
HDB Resale Prices: Growth Moderates But Continues
HDB resale prices continued their upward march in 2025, extending a streak that began in Q2 2020 to 22 consecutive quarters of growth. However, the pace of increase slowed significantly compared to previous years. After surging 9.7% in 2024, resale prices rose by approximately 3% to 4.5% for the full year 2025.
The HDB Resale Price Index reached 209.7 in September, climbing 0.6% month-on-month and 4.8% year-on-year. Quarterly growth narrowed progressively throughout the year, from 1.6% in Q1 to just 0.4% in Q3, suggesting the market was entering a stabilization phase.
Several factors contributed to this moderation. The government launched 29,975 BTO and Sale of Balance Flats in 2025, a 41% increase from the previous year, diverting significant demand away from the resale market. Transaction volumes fell accordingly, with approximately 25,500 flats expected to change hands for the full year, down 12% from 2024’s 28,986 units.
“After years of rapid price growth, the HDB resale market finally entered a phase of stabilization in 2025,” property analysts noted. Yet for many would-be buyers, particularly younger households and first-timers, these “moderate” increases still meant paying substantially more than they could afford.
Private Property: New Heights Across All Segments
Singapore’s private residential property market demonstrated remarkable resilience in 2025, defying expectations of a correction despite elevated prices and global economic uncertainty. The Urban Redevelopment Authority’s Property Price Index for all private residential properties increased 5.08% year-on-year by Q3 2025.
Non-landed private homes saw prices rise 5.57% year-on-year, supported by firm demand across various market segments. Developers sold approximately 11,000 private homes in 2025, the highest quantity since 2021 and up 66% from 2024. The momentum was driven by lower interest rates, with some banks offering fixed-rate mortgages below 2.5%.
Average prices for new condominiums hit striking new benchmarks. In the Core Central Region (CCR), prices escalated 26.2% from $2,326 per square foot (psf) in Q2 2025 to $2,937 psf by July-August. The Rest of Central Region (RCR) set new records at $2,384 psf, while even the Outside Central Region (OCR) saw prices approach $2,154 psf.
The narrowing price gap between regions was particularly noteworthy. From Q3 2020 to Q3 2025, the CCR recorded cumulative growth of 27%, compared with 47% in the RCR and 46% in the OCR. This convergence meant traditional “affordability” segments were becoming increasingly expensive.
The average condo price in Singapore reached $1,989,082 in 2024, with the median at $1,780,000—approximately 3.2 times higher than HDB flat prices. For many upgraders and first-time private property buyers, these figures represented an increasingly steep climb from public housing.
Interest Rates: Relief, But Limited
One area that did provide some relief was the interest rate environment. Following the US Federal Reserve’s rate cuts, Singapore’s mortgage rates trended lower throughout 2025. Some banks began offering fixed-rate mortgages below 2.5%, improving affordability for buyers and reducing monthly repayment burdens for existing homeowners.
The three-month Singapore Overnight Rate Average (SORA), the key benchmark for floating home loan rates, declined from its 2023-2024 peaks. This easing was expected to continue into 2026, with further Fed rate cuts anticipated.
However, the impact on affordability was limited. While lower rates improved borrowing capacity and monthly cash flow, they simultaneously stimulated demand, contributing to sustained price growth. The net effect was that buyers could afford slightly more in monthly payments, but faced higher absolute prices.
The Affordability Squeeze: Income vs. Prices
Perhaps the most concerning trend in 2025 was the widening gap between housing prices and household incomes. Analysis showed Singapore’s price-to-income ratio approaching the upper bounds of historical affordability levels.
For private property, the average price-to-income ratio climbed to 14.6x in 2024, up from 14.1x in 2023 and well above the historical average of 13.4x between 2000 and 2023. This meant that sustainable price increases would require either faster income growth, larger down payments from buyers, or a shift toward smaller, lower-priced homes.
While median monthly household income for employed residents rose to $11,297 in 2024, representing a 3.9% nominal increase and 1.4% real increase after accounting for inflation, this growth lagged significantly behind property price appreciation. Individual median income reached $5,500 monthly, but even with steady wage growth over the past decade, incomes struggled to keep pace with housing costs.
For a household to afford an average resale condominium in the OCR, they needed a combined monthly income of nearly $12,000, in addition to having almost half a million dollars ready for the down payment. To afford new private property in the RCR or CCR, even higher income thresholds applied, often exceeding $15,000 to $20,000 monthly.
The Total Debt Servicing Ratio (TDSR), capping debt obligations at 55% of gross monthly income, further constrained buying power. Combined with the 25% down payment requirement for private property (with at least 5% in cash), many middle-income households found themselves priced out of the private market.
Regional Variations: Location Still Matters Most
Housing affordability in 2025 varied significantly by location, with mature estates continuing to command substantial premiums while suburban areas offered relatively more affordable options.
In the HDB market, mature estates like Bishan, Queenstown, and Toa Payoh saw five-room and executive flats consistently transacting above $1 million. The average resale price gap between five-room flats in mature towns ($931,550) and non-mature towns ($715,799) in Q3 2025 was 30%, highlighting the location premium.
The clustering of high-value transactions in centrally-located estates underscored an enduring reality: location remains the ultimate differentiator. Older, established estates with well-developed amenities, proximity to MRT stations, and central positioning continued to outperform, particularly as new supply in these areas remained limited.
For private property, the same dynamic applied. CCR properties in prime districts like Orchard, River Valley, and Marina Bay commanded the highest prices due to prestige, limited supply, and CBD proximity. RCR areas like Queenstown, Bishan, and Marine Parade offered a balance between accessibility and relative affordability, while OCR properties in Punggol, Jurong, Woodlands, and Tampines represented the most affordable private options on a psf basis.
However, even OCR new launches were pushing prices significantly upward. Projects in suburban locations increasingly approached $2,000+ psf, narrowing what was once a substantial price differential with more central locations.
First-Time Buyers Face Mounting Challenges
First-time homebuyers confronted particularly acute challenges in 2025. Policy changes, including the reduction of the HDB Loan-to-Value (LTV) ratio from 80% to 75%, required buyers to provide higher upfront payments. For a $600,000 flat, the maximum loan dropped to $450,000 (from $480,000), resulting in a $30,000 higher cash/CPF outlay.
On top of down payments, buyers needed to budget for Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD) if applicable, property valuation fees, legal fees, and renovation costs. The 5% minimum cash portion for down payments was mandatory and could not be paid with CPF, creating liquidity challenges for buyers with limited savings despite healthy CPF balances.
The increased allocation of BTO flats to eligible singles and expanded eligibility criteria helped some first-timers, but long wait times of four to six years for BTO completion drove many to the resale market, where they faced premium prices and intense competition.
For those eyeing private property, entry barriers were even higher. Middle-income families—often termed the “sandwiched class”—found themselves particularly squeezed, earning too much to qualify for maximum housing grants yet insufficient to comfortably afford private property.
Government Interventions: Supply and Subsidies
The government deployed various measures to address affordability pressures in 2025. The substantial increase in BTO and SBF supply was intended to provide more affordable options and cool resale demand. New policy initiatives, such as the Family Care Scheme giving singles priority access when purchasing near parents, aimed to support specific demographic needs.
Enhanced CPF Housing Grants for first-time buyers, ranging up to $80,000 for eligible households purchasing resale flats, helped bridge affordability gaps. The government also maintained cooling measures, including ABSD and TDSR restrictions, to prevent excessive speculation and over-leveraging.
Despite these interventions, critics argued that the fundamental issue remained one of supply constraints relative to demand. While BTO launches increased, Singapore still faced a structural housing shortfall. The limited land available for residential development, combined with strong population growth and household formation, continued to exert upward pressure on prices.
Global Comparison: 17th Most Affordable, Yet Still Challenging
In May 2025, the Demographia International Housing Affordability report ranked Singapore 17th most affordable among 95 major housing markets globally. The report credited this relatively favorable ranking to extensive public housing policies, generous subsidies for first-time buyers, and high homeownership rates approaching 90%.
Singapore’s median multiple for resale HDB flats stood at 4.2, earning a “seriously unaffordable” classification despite the comparatively good global ranking. For context, Hong Kong remained the world’s least affordable market with a median multiple of 14.4, while US cities like Pittsburgh, Cleveland, and St. Louis led in affordability.
The report highlighted that while Singapore’s housing market showed some stabilization, the price-to-income ratio still positioned homeownership out of reach for a substantial segment of the population, particularly in the private property market where no subsidies exist.
Looking Ahead: Will 2026 Bring Relief?
As 2025 drew to a close, the outlook for 2026 remained one of cautious optimism tempered by persistent challenges. Property consultancies projected private home prices to increase between 1% and 4% in 2026, representing continued but slower growth. HDB resale prices were expected to rise 3% to 4.5%, maintaining their upward trajectory albeit at a moderated pace.
Several factors could support modest affordability improvements. Interest rates are expected to decline further as the US Fed continues its easing cycle, potentially bringing mortgage rates below 2%. The number of HDB flats reaching their Minimum Occupation Period will increase to 13,484 in 2026, up from approximately 8,000 in 2025, providing more resale supply.
Income growth is projected to remain steady, with wages potentially rising 4% to 5% in nominal terms. If property price increases lag behind income growth, real affordability could gradually improve over time.
However, significant headwinds persist. Singapore’s economy faces global uncertainties, including potential recession risks and trade tensions. Construction costs remain elevated, limiting developers’ ability to reduce prices. The structural housing shortage of several hundred thousand units means supply-demand imbalances will continue exerting upward price pressure.
For first-time buyers, upgraders, and young families, the message is clear: housing will remain a significant financial commitment requiring careful planning, realistic expectations, and potentially compromises on size, location, or property type. Those with flexibility may find opportunities in suburban locations or smaller unit types, while others may need to extend their timelines or adjust their expectations.
The “new normal” in Singapore’s property market is one of elevated prices, moderate growth, and persistent affordability challenges—a reality that buyers, sellers, and policymakers will need to navigate for years to come.
What You Can Do
For prospective buyers navigating this challenging environment:
Calculate your true affordability: Use comprehensive calculators that account for down payments (including minimum cash components), TDSR limits, stamp duties, and ongoing costs like maintenance, property tax, and insurance. Don’t stretch to the maximum loan amount.
Consider all options: Evaluate BTO flats despite long wait times, explore resale flats in non-mature estates, or consider Executive Condominiums as a middle ground between HDB and private property.
Maximize grants and subsidies: Ensure you’re claiming all eligible housing grants, particularly Enhanced CPF Housing Grants for first-timers, which can provide up to $80,000 in support.
Plan for the long term: Property purchases are decades-long commitments. Model different scenarios including interest rate increases, economic downturns, and personal financial changes.
Stay informed: Monitor market data releases, policy announcements, and economic indicators. Timing matters less than fundamentals, but understanding market conditions helps with decision-making.
Seek professional advice: Consult property agents, financial planners, and mortgage specialists to understand your options and implications fully.
The 2025 housing affordability crisis in Singapore reflects broader tensions between limited land supply, strong demand, global economic forces, and social expectations around homeownership. While the situation remains challenging, understanding the dynamics empowers buyers to make informed decisions aligned with their financial circumstances and life goals.