Property Hunter Magazine September Issue 2014 | Page 64

/// East Malaysia Property News

Gen-Y Buyers Lack Trade-Up Mentality
“The other alternative is to look for a property
that’s further out of the city,” says Raine and
Horne International Zaki and Partners Sdn Bhd
senior partner Michael Geh.
Buyers should look for properties located near
mass transportation systems like the Ampang and
Kelana Jaya light rail transit (LRT) and the yet-tobe-completed mass rapid transit (MRT) line.
“Otherwise, they might have to deal with traffic
jams if there are no people movers. Unless you
are near an LRT, MRT or any kind of ‘T’, you will
need a car to get to places,” he says.
And having to own a car would also affect what
young buyers can afford in a property.
Geh’s rationale for looking for properties along
the mass transportation systems is that these
properties would usually appreciate in value
faster.

When it comes to Generation Y (Gen-Y) seeking
to buy their first property, there appears to be a
huge expectation gap.

Shanker during a forum held at the Property
Investment Convention 2014 organised by the
Wealth Mastery Academy on July 12 and 13.

Apparently, Gen-Yers won’t buy into low-cost and
medium-cost apartments and houses because
they aim too high, desiring the high-end living that
their salaries are unable to support, according to
several property experts.

“And they [Gen-Yers] are not worried that they will
have no income. For the Gen-Xers, they will have
another job waiting before they resign,” he says,
explaining that the resignation is merely a matter
of transitioning from one employer to the next.

The crux of the matter is the lack of a tradeup mentality among younger house buyers,
particularly among Gen Yers, who are eyeing what
they want and not what they can afford.

“The Gen-Yers are different and it is because they
are brought up differently. In my time, if I lose my
job, I would have been whacked across the room,”
he says. “Now, when the Gen-Yer quits, their
parents are sympathetic to them.”

These are the 20- to 30-year-olds who are starting
out, some of whom are just starting to earn
their first salaries of around RM3,000 a month,
says Malaysian Institute of Estate Agents (MIEA)
president Siva Shanker.
“They want something that they cannot afford
now. So what do they do? They save up. However,
the house prices move up faster than they can
save. But if they practise trade-up, affordability will
not be an issue,” he says.
Gen-Yers, also known as the Millennials, were
born during the 1980s and early 1990s, and are
often referred to as “echo boomers” because they
are the children of parents born during the baby
boom.
Because the generation that is born during
this time period have had constant access to
technology in their youth, their perception is
different to their predecessors, the Generation X
(Gen-X).
For example, the Gen-Yers are not afraid of
quitting their jobs without a back-up plan, says

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Shanker suggests that instead of having to deal
with saving up for that condominium “that’s out of
reach”, younger buyers should consider the tradeup method as an investment route to securing
the home they desire.
The problem for most young buyers is that they
are looking at the primary market in hot spots
and the property prices in those areas are most
certainly beyond what they can afford. “Don’t look
for a hot spot. Look for a spot that’s hot for you
and make it work for you,” he tells FocusM.
The secondary market makes up about 80%
of the local property market. Compared to the
surging prices of high-rise properties in hot spots,
the secondary market provides a more affordable
alternative.
Many developers are also opting to develop upmarket properties offering world-class facilities
and amenities, and this translates to higher
prices, forcing young buyers to look elsewhere for
more affordable property.

But the question is how many young buyers will
consider trade-up as a viable option if it does not
fit into the criteria of their standard of living. The
idea of trade-up may be more easily adopted by
the middle- or low-income groups.
Property entrepreneur Prudence Wong shares
her experience of trade-up, coming from a family
that was not well off.
Her trade-ups obviously worked for her. Her first
investment – an apartment – had offered good
rental cash flow and when the time came for her
to dispose of it, she enjoyed a substantial capital
appreciation.
“I started small. I moved from a small apartment
to condominium units, to shoplots, factories, and
bungalows and now to land,” she says.
“It’s not what you invest in but how you invest. I
had basically two strategies. The strategies are
maximising the rental cash flows and multiplying
the profits. How do I do that? I add value to the
properties I invest in.”

Gen-Yers, also known as the
Millennials, were born during
the 1980s and early 1990s, and
are often referred to as “echo
boomers” because they are the
children of parents born during
the baby boom

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