Is it common to spend nearly half your salary on rent in SG?

Independent Singapore

2 days ago

SINGAPORE: A woman who's about to move to Singapore for work asked in a Reddit post if it's common to spend almost half of one's salary on rent.
U/Internal-Parking7010 wrote in a Jun 29 (Sunday) post on r/askSingapore that she will be earning S$7,000 a month and is looking at housing options since she hopes to have a place of her own instead of sharing it with flatmates. From what she's seen, a one-bedroom or studio flat 'in a decent area' may cost around S$2,500 to S$3,000 a month.
'I don't live luxuriously and am happy eating hawker food most of the time, so I'm wondering: Is it common or reasonable to spend almost half of your salary on rent in Singapore? Would that be financially reckless or just the norm for people who value privacy?' she asked.
Conventional wisdom says that rent should be capped at 30% of one's income. Those whose income is variable, or who have a lot of debt, are often advised not to shell out that much but to choose more affordable housing options. See also Number of luxury condos bought by Chinese up 158% in Q1
However, 'Deciding how much you should pay for rent isn't always a straightforward calculation. Going above the recommended threshold of 30% of your gross monthly income can make it harder to cover other expenses and meet savings goals. However, personal rent affordability can vary depending on a range of factors such as overall budget, outstanding debt, geographic location, and other housing-related costs,' reads a blog entry from a top financial services group in the United States.
Many Reddit users who commented on the post felt that spending half of one's paycheck on rent was quite high, and suggested co-living instead, at least initially.
'S$3k on a S$7k salary is a little on the high side in my opinion, but doable. I'm assuming 7k is pre-tax. I'd recommend going with a co-living company for six months or so. S$1.5k~ should get you a master room with an ensuite bathroom. Less chance of nightmare landlords with a co-living company, too. It'll also give you time to get a sense of where in Singapore you'd like to stay. Then, after six months, you can reconsider if you'd like a whole unit or a different location,' one wrote.
'Seconding the co-living option. It's easier to withdraw from this arrangement if it doesn't suit you than to break a lease, and yes, landlords can be extremely nightmarish, especially since you're a foreigner; the more unscrupulous ones will try to push you around,' wrote another.
A commenter, however, had a different take, writing, 'If space and quiet are your absolute non-negotiable priorities, then $3k should be looked at from the perspective of value and not cost.
'If having quiet allows you to hustle harder (therefore earning more), cook at and find entertainment at home, then it'll be a money saver, compared to a flat share where you spend every possible moment outside, spending more money and burning mental energy.'
'Do consider that your salary is subject to tax. On top of rent, there are also bills. So you may end up spending more than half of your salary on just keeping a roof over your head,' another warned. /TISG See also HDB flats resale prices increase for the first time in 9 Quarters
Read also: 'Things are hard right now' — Family pays S$4K/month house rent; their mum even struggles to return to the workforce after 15 years being a housewife