Singapore Condo Costs Strain Budgets in 2025

In 2025, Singaporeans face mounting financial pressures as ageing condominiums, with 31% of the city-state’s 2,703 developments now over 30 years old, grapple with deteriorating infrastructure and inadequate sinking funds, necessitating special levies like the $1.7 million imposed at Fernwood Towers. This trend, coupled with a high cost of living—evidenced by a 2.5% inflation rate in 2024 and HDB resale prices averaging $582,000 in Q1 2025—underscores the urgency for robust budgeting and long-term financial planning. The projected rise to 1,160 condos over 30 years by 2035 amplifies these challenges, particularly for middle-income households. This article argues that disciplined budgeting, proactive sinking fund contributions, and leveraging digital financial tools are essential for Singaporeans to mitigate the financial strain of rising condo maintenance costs, ensuring long-term asset value preservation and financial stability in a high-cost environment.

The ageing of Singapore’s condominiums, with 836 developments exceeding 30 years, imposes significant financial burdens on owners, particularly through unexpected special levies to address infrastructure failures. At Fernwood Towers, a 31-year-old freehold condo, residents faced a $1.7 million levy for lift overhauls, translating to $320 monthly payments per household over 24 months. This cost, layered atop regular maintenance fees, strains budgets, especially for retirees or smaller developments where costs are spread across fewer units. With private residential prices rising only 0.6% in Q1 2025, older condos trading at $1,592 per square foot (psf) risk value depreciation if maintenance issues deter buyers, particularly against newer launches priced at $2,427 psf.

Inadequate sinking funds, often set decades ago and unadjusted for inflation, lie at the heart of Singapore’s condo maintenance crisis, forcing MCSTs to resort to special levies that spark owner resistance. Many developments, established when maintenance costs were lower, collect insufficient contributions, with some smaller condos allocating only $100 monthly per unit compared to the $200–$300 needed for modern infrastructure upkeep. The Building and Construction Authority’s engagement with MCSTs highlights the need for policy reforms, such as mandatory minimum sinking fund contributions or technical audits for buildings over 30 years. Proactive councils, like Sanctuary Green’s, have successfully raised funds by presenting data-driven arguments, increasing contributions by 10% in 2024 to prepare for future capital works.

The financial strain of condo maintenance often intersects with housing debt, as Singaporeans juggle mortgage payments and levies in a high-cost environment. With HDB loan interest rates at 2.6% and private condo loans averaging 3.5% (3-month SORA plus 1.1% in April 2025), the Total Debt Servicing Ratio (TDSR) of 55% ensures debt remains manageable, but special levies push some households beyond this threshold. For instance, a $1,200 monthly mortgage payment for a $400,000 HDB loan, combined with a $320 levy, consumes 38% of a $4,000 monthly income, leaving little for savings or discretionary spending. The 2023 OCBC Financial Wellness Index noted that 23% of Singaporeans are limited to essential spending, highlighting the challenge of balancing debt and maintenance costs.

The pervasive lack of financial literacy, with 55.2% of Singaporeans self-identifying as financially illiterate in 2024, exacerbates the challenges of managing condo maintenance costs. Many owners, particularly younger ones aged 18–24, lack awareness of their monthly spending, with 52% unable to track expenses, leading to reactive financial decisions when faced with levies. The Ministry of Education’s push to integrate financial literacy into curricula aims to address this, but adoption remains slow, with only 30% of young adults engaging with formal financial education programs. Community initiatives, like Sanctuary Green’s data-driven approach to securing sinking fund increases, demonstrate the power of informed decision-making, which individuals can replicate through personal finance tools.

The rising costs of condo maintenance pose a significant challenge to retirement planning, as special levies divert funds from savings for older Singaporeans, many of whom rely on CPF payouts. With the Enhanced Retirement Sum raised to $424,000 in 2025, providing up to $3,300 monthly CPF LIFE payouts from age 65, retirees must prioritize CPF top-ups to secure adequate retirement income. However, a $320 monthly levy for 24 months, as seen at Fernwood Towers, reduces disposable income for retirees earning $2,500 monthly, consuming 12.8% of their budget. The 2024 OCBC Financial Wellness Index found that 79% of Singaporeans lack a retirement plan, with planning often delayed to age 42, increasing vulnerability to unexpected costs like maintenance levies.

The escalating costs of maintaining Singapore’s ageing condominiums, projected to affect 1,160 developments by 2035, demand a strategic approach to personal finance that prioritizes budgeting, sinking fund contributions, and retirement planning. Singaporeans should adopt digital tools like Seedly and DBS NAV Planner to track expenses and allocate 10–15% of income to sinking funds, treating these as non-negotiable expenses akin to CPF contributions. For debt management, adhering to TDSR guidelines and refinancing loans to secure rates below 3.5% can free up funds for maintenance and savings, while cashback apps like ShopBack offset discretionary costs. Retirees, in particular, must balance levies with CPF top-ups to the Enhanced Retirement Sum, leveraging the 4% interest rate to outpace inflation’s 2.5% impact.