Instead of blowing their cash on pricey gadgets, young Malaysians are saving up for their first home.
While most Gen Y shy away from owning property in developed countries and big cities, demand from millennials here is still holding, especially with parents assisting them with the downpayment, Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri F.D. Iskandar said.
(Gen Y, also known as millennials, are commonly referred to those who are born in the early 1980s to 2000s. They are sometimes referred to as the strawberry generation).
Demand from first-time buyers, including the younger generation, remains strong although housing affordability is a challenge, said Bank Negara.
The central bank added that they accounted for 75% of 1.47 million borrowers.
Owning and investing in a house remains a priority for many Malaysians.
This is reflected in the household borrowing trend where the buying of homes continues to be the fastest growing segment of household lending, with annual growth sustained at double-digit levels (11% as at end-March 2016), said Bank Negara in a statement.
Those who cannot afford it themselves, and do not have parents to help, turn to their friends.
In his 30s, Daryl Toh, and two of his college mates own a condominium in Penang; they pooled their resources to purchase the unit five years ago.
“It’s in a premium area and since we couldn’t afford a place on our own – at least not prime property, we became joint owners.”
Financial adviser Yap Ming Hui said it makes perfect sense to own.
“Of course the Gen Y here are still keen on buying. You pay the instalments and eventually own a home. Only those who can’t afford to buy are forced to rent.”
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector of Malaysia adviser Wong Kok Soo said property prices in Hong Kong have escalated beyond the purchasing power of the Gen Y but the trend hasn’t caught on here – yet.
Wong, who is also a consultant with the National House Buyers Association, however, said there were signs that the Gen Y could no longer afford to live in big cities like Kuala Lumpur, Penang Island, Johor Baru and Sabah.
“Parents are chipping in for the downpayment. And, commuting from the suburbs to the city centre is still an option.
“But when prices get inflated far beyond their means, the same will happen here (as in Hong Kong),” said Wong, who, however, felt that even if demand dropped, it would not be substantial.
Iskandar agreed, saying that although the property market was slow now, the drop was manageable.
“Like everything else, it’s cyclical.
“The property market goes up for years and after some time, begins falling before rising again.”
He said the market would pick up with the completion of infrastructure development and public transportation facilities.
Rehda, he said, was working closely with the Government to find ways to facilitate home acquisition especially among first-time buyers.
“We proposed a review of the financing guidelines that have negatively impacted buyers’ ability to secure financing,” he said.