Sunday, July 14, 2013

Young professionals in Malaysia struggle to own property

As a "compassionate" property investor / collector, I find the dramatic rise in inner-city and Central Business District Kuala Lumpur quite acceptable (in some cases) as they are mainly catering towards the expat rental markets. But there is really no excuse in the current prices of suburban properties. Developers should stop packaging their wares with low-quality furnitures and unjustifiable fancy marketing ploys such as SoVo, SoFo etc as an excuse to drive up margins. Here's why...

http://www.asiaone.com/News/AsiaOne%2BNews/Business/Story/A1Story20130714-437011.html


Malaysia - Wanting and actually being able to afford your own place are two very different things.
With the oversupply of high-end condominiums shadowing the property market, fresh graduates and young professionals may have to either send out an SOS to their parents for cash or live at home because having "my own space" just got a little tougher.
Fresh graduate K.T.S. Chua, 23, who recently took out a RM30,000 personal loan to start a hotdog business, is relieved at narrowly missing the July new personal loan cap ruling but the shorter home loan repayment period has dampened the budding entrepreneur's plan for a bachelor pad.
He currently lives at home with his parents and two brothers.
"I was looking to get a place of my own; unfortunately, the new ruling will gravely affect my plans to purchase a home. Without the new cap, it is already so hard for me to buy property and I will have to put it on hold.
"Needless to say, I am really concerned about the higher monthly repayments and qualifying for the housing loan," he sighs.
Most of his friends who have just started working are "fuming" over the new ruling, the Penangite shares.
Unless you are from a rich family, plans of owning a home will have to be put on the back burner, they feel.
"Those from wealthy families can ask their parents to support them in purchasing a house. But I think it's safe to say that many more fresh graduates will be staying with their parents until they are more stable and able to move out on their own," he says.
At the end of the day, he cites high property prices as the biggest problem, not the new ruling.
He laments how property prices keep increasing but the salaries of the fresh graduates and even those who have been working for years have not.
Lecturer Cheryl Withaneachi, 30, agrees.
The Teluk Intan lass, who currently lives in Petaling Jaya, says the new ruling makes it difficult even for professionals to consider buying a house.
On top of rising house prices, the situation becomes practically impossible, as though housing is only meant for the urban rich these days, she grumbles.
She says that with higher repayments, it would be more practical for her to continue renting despite having "seriously considered" putting the monthly rental towards purchasing a house.
Cheryl started working almost eight years ago and is currently renting a house for RM1,500 - not inclusive of utilities which, she says, is pretty high.
"Many of my friends who are around my age cannot afford a house and this is not only due to the ruling of late but the exorbitant house and apartment prices.
"I dread to think how fresh graduates or those who do not earn very much cope," she says, adding that fresh graduates who are based in the same location as their parents will definitely opt to stay in the family home due to the increasing living costs of transportation and housing.
"The rest of us who are not from the city have no choice but to struggle.
"The only way to buy a house is if it is jointly bought. So if you are married, the combined funds allow for more flexibility to purchase your first home but in my case (being single), it is a whole different ball game," she says, before calling on the government to look into house prices, instead of car prices, as a person can live without the latter.
"Paying through our nose for accommodation without actually owning the property is painful," she adds.
Single mother Fatimah Zakaria, 34, is also feeling the heat,
The frustrated civil servant, who currently lives with her adorable six-year-old daughter in Shah Alam, has been scouting around for a place in Selangor for some time now but it keeps getting harder due to high prices "that just keep rising".
"And we are not talking about the bank's interest rates yet," she stresses.

5 comments:

Live Long MU Fan said...

I agreed with the article, but it is not just happening in Malaysia. Nevertheless, the govt should make homes more affordable.

Also if one is willing to live in older condominiums, there are older units in Klang Valley selling at Rm300K or less. Furthermore, there are also apartments in Nilai at about Rm70k.

David said...

I find your blog informative and honest. Obviously you have alot of experience in properties.

I'm practiclly a property newbie, having been looking at properties on and off but I've not committed to anything yet and this is purely down to timing and perhaps a little indecisiveness on my part.

What is your opinion of the two opposing views:

1. Property prices will continue to rise, if you don't enter the market now, you will just lose out.
2. Property prices are so hot now that the market is long overdue for a correction. Wait it out, there will be bargains to be had.

So as you can see from my query I think you know why I've not entered the market.

Appreciate your honest feedback.

sinleong said...

1st view - don't believe it. it depends on the price you enter, not the time you enter.
2nd view - don't believe it too... bargains can come anytime, you just need to study and wait.

Jenny said...

Hi Sin Leong,

As a newbie who would like to involve in the property investment, I found your blog extremely helpful, informative and genuine :) I benefit a lotsssss!

I would like to know it is wise to invest in the education hub nearby Nilai, due to the numbers of colleges and more crowd are coming into Nilai in coming years?

I come to know about a new project (yet to launch) name MesaHill in Nilai (http://www.greentarget.com.my/mesahill), do you think it has very good potential for rental and capital appreciation?

Thank you for sheding some light.

sinleong said...

i must admit i dont know much about nilai.... but back in 1999, i went to survey the possibility of turning one of the abandoned row of shophouses into hostels. it didn't quite work out but that was in 1999