HOT TOPIC | First Home Buyers: Is Generation-Y’s Future at Stake?
carved a successful career in real
estate by being driven to succeed.
His fortitude comes from the belief
that one should equip themselves
with the necessary knowledge to
accomplish success and finding
ways to gain this knowledge.
urban or suburban location is
escalating. A major factor causing
difficulty in owning a home is the
worrying trend of omission in
financial planning amongst the
youngsters,” says Ishmael.
First Home Buyers:
“Some would rather not think
about their financial health as they
get more stressed out looking
at the figures. However, this is
counterproductive.”
STAKE?
Is Generation-Y’s Future at
G
eneration-Y has been defined
as the generation of people
born during the 1980s
and early 1990s. It is not a globally
accepted definition by any standard
as there are age variances between
countries but there is no denying that
this group of people share very similar
characteristics.
Children born during this time period
tend to be web savvy or highly
connected via social media due to
the constant access to technology
in their youth. They are thought to
be more family-oriented and place a
high importance on work/life balance
where a job, a house and a family
are the main priorities. But achieving
these life goals is getting more
daunting with escalating cost of living,
household debt and property prices.
With the current property sentiment
in Malaysia, would it be possible that
Malaysia’s Generation-Y end up as
a generation of renters instead of
house owners? Or can they become
as property investor savvy as they are
technology savvy, and own a house by
the time they reach 30.
Charles Tan, a property analyst who
blogs about the local property market
says entry level house prices can be a
crippling factor to any first time house
buyer but this may not be the case in
Malaysia.
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“Although my situation can be
vastly different compared to my
peers, I would advise them to
not sell themselves short. Do not
underestimate your capability but
also do not overestimate your
purchasing power. When it comes
to your first home, purchase one
that is closer to town or your work
place. Because of your young age,
your focus should be on developing
your career and strengthening your
purchasing power. Therefore, your
first property may be a little bit
smaller and much older but have a
plan on upgrade in the future.”
“There are countries such as
Singapore, Hong Kong, the UK and
even Australia where whether you
are a Gen-Y, Gen-X or whatever Gen,
the minimum entry point to buy a
property is very high,” he says.
“In Malaysia, if you search any
property sites, you would notice that
the entry point is much lower. As
long as you do not buy in hotspots or
huge units, you can get an apartment
of below 1,000 sqft for around
RM300,000.”
If this is the case, and buying a
property is within reasonable reach,
why is there an affordability issue
amongst our Gen-Y? The conundrum
can perhaps be explained by looking
at the benchmarks set by the Gen-Y
on property ownership.
Opines Charles: “For a Gen-Y, with a
10% down payment and a 35 year
repayment schedule, they can easily
afford an entry level unit. However,
the perception is that if they buy such
units, they would lose face. They also
do not want to accept that they must
start lower as everyone wants to start
as high as they can. That’s the reason
why house prices keep increasing.
Everyone is buying where everyone
wants to buy.... no one wants to stay
in a locality where everyone says is
not so classy.”
Plan smart, invest wisely
As daunting as it may sound, buying
or investing in property is not an
elusive dream. It does however
take a lot of thinking, planning and
awareness to mke that all important
first step.
Income vs Outcome
Ishmael Ho is a director at Ho Chin Soon Research Sdn Bhd, a
property information company specializing in data on land use
and ownership for industry players. He is also 26 years old and
a property owner. He wrote his first cheque for two secondary
commercial shop house lots in 2014 and is about to purchase
a residential unit for own use this year. For Ishmael, having the
benefit of a mentor and work experience to guide him through
the intricacies of property ownership has alleviated some of
the anxieties the come into play when deciding to invest in his
first property.
Besides money, one of the major concerns that may prevent
many young Gen-Y’s from purchasing their first property is an
aversion to early financial planning.
“No doubt with income levels not catching up with house price
movements, the financial stress to own property in a decent
Chris Tan, a lawyer specializing in
real estate thinks that everyone can
afford to buy a house before they
turn 30 as it is a question of will
and whether one is aware of all the
options available interim of owning
the first home.
“The first mindset change is that
“your first home is never your dream
home”,” he notes.
“Your first home should be the
one that fits your immediate
need to cover only an immediate
foreseeable future. The truth is that
due to the fast changing lifestyle
today, it is highly likely that you will
be staying in a few houses during
your entire lifetime.
Early financial planning can gi ve young couples a head start in purchasing their
first home
”The connectivity and mobility today
also means that the concept of
a house and a home need to be
and owner of two properties with a
total combined value of just under
RM1 million. The four words she
redefined. There are many ways to
buy a home today, from developers,
secondary market to even auction as
well as PR1MA housing and low cost
housing schemes by the respective
state governments.”
used to describe her foray into
property investment: security,
retirement, asset accumulation. For
Vincent, an operations manager
with a real estate firm, his decision
to get into property investment is to
secure his long-term future which
included a family.
Being clear of what resources are
available at your disposal and not
being afraid to use them is another
stepping stone to house ownership.
“Money is never enough but one
can always explore how to leverage
on the many available resources
within one’s network. Parents,
family, friends and even employer
should never be ruled out. Work out
a feasible and repayment friendly
scheme with them is a way out.
Consider your EPF too, it might
not be enough on its own but it is
certainly helpful. Find out more on
some government initiated schemes
to see if you are eligible. When there
is a will, there is a way,” adds Chris.
Willpower, self-confidence and
forethought are noble attributes,
and when applied to property
purchase and investment, they can
be absolutely necessary.
Mah and Vincent are two young
property investors in Penang. Mah is
26 years old, an accounts manager
“I decided to invest in property at a
young age was because it was time
to start a life of my own and build a
family,” he says
“So basically, my top priorities
were to get a home, and make a
smart investment. It took some
pressure and mountains of advice
from my mentor, but I dug deep
and managed to purchase my first
home on my own at the age of 25.
Thanks to the advice on my initial
investment, I can now confidently
look forward to a second one.”
For Mah and Vincent, their choice
of first investment was to build a
foundation that will continue to
grow into a future that they want
for themselves. Making sacrifices
to achieve this goal comes with
the territory although we are often
subjected to situations that are
outside of our control.
Enoch Khoo is a Sabah boy who has
“The challenge faced by most
Malaysians is that almost all fresh
graduates who enter the workforce
are burdened by a car loan. If we
look at most developed countries
with outstanding public transport,
the need to own your own transport
is a choice but in Malaysia everyone
is forced to own a car thus limiting
the disposable income for many and
affecting the ability to own a home,”
comments Enoch.
“My advice to young new grads is
to buy a second hand car and not a
new car when they start out in their
career. Investing in knowledge and
having multiple sources of income,
provided it is not a conflict of
interest to your current job, should
also be explored. At the end of the
day, spend more time improving
yourself and less on complaining
about the situation.”
The one undeniable truth about
property is that the longer you wait,
the pricier it gets. The Ministry of
Urban Wellbeing, Housing and Local
Government is trying to control
the increase in house prices while
maintaining market price as a
reasonable level so that homes will
be affordable for the masses.
However, the government cannot
single-handedly keep building
homes on its own. The private sector
has to play its part as well. Next year
will likely see the implementation of
new strategies designed to further
boost the capabilities of the private
sector in building affordable homes
nationwide.
How policymakers manage the
risks in going forward with their
plans will be crucial to housing the
nation, for the Gen-Y and the future
generations.
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