It is an undeniable fact that the youth of today do not have it as easy as their parents did in terms of attaining financial stability. The rising prices of goods and services coupled with factors such as the inability to secure a well-paying job and other lifestyle choices play a significant role in slowing down an individual’s attainment of a strong financial foothold. iProperty.com had the pleasure of speaking to Reapfield Academy’s President and Group CEO Dr Gerard Kho who has a very unique approach when it comes to Gen-Y.
What are some of the obstacles that Gen-Y faces when it comes to buying property?
I would have to say that the most difficult step they face is obtaining the finances necessary to make the purchase. An individual may be able to have their deposit in order but securing a loan can prove to be quite a hurdle especially given the fact that the bank requirements these days are more strict than they used to be in the past.
We also need to take into account the fact that Gen-Y is attracted to different things. Their buying patterns are not similar to those who grew up in previous generations.
They appreciate finer details like the design and facilities that come with the property that they purchase. However, one must ask themselves if the ‘frills’ that they desire so much are really necessary in light of rising property prices.
Young couples nowadays rarely have more than three children unlike in the olden days. With that in mind, do smaller households need to live in big landed properties which cost more than they can afford? Financing becomes an issue when an individual spends too much on something they do not need.
Ask yourselves not how much cake you can eat but instead how much you should be eating.
The fact that property prices are rising to new highs day by day can be seen as a grim reality. However, it is times like these when we should not lose sight of what is important.
Is it more crucial to buy the property you want regardless of its price tag or the property you can make do with for now until you can afford something better in the future? Additionally, if you already own your own property, should you invest further? Should you buy not one or two but three houses just to keep up with the Joneses?
If you have the means and the capacity to afford buying as many properties as you want, then by all means go for it. However, once you find yourself struggling to make payments and stretching your means, you will know that you have bitten off more than you can chew. It is always best to know your limits and not let yourself get to this point. Moderation is the fundamental principle which should be practiced in every aspect of our lives.
What factors should Gen-Y consider when it comes to buying property?
First and foremost, they should always look at what they can afford. A handful of Gen-Y may be able to afford whatever they set their eyes on but realistically speaking, not everyone is that lucky.
The majority of the Gen-Y market cannot afford to buy their own place yet. It is not surprising as times are hard and the struggle is real. However, they should not under any circumstances let this dampen their spirits. If you cannot afford to buy a house, rent one. Save up enough money in the meantime and invest in your own property later.
I find that those belonging to Gen-Y are fiercely competitive and tend to set very high standards for themselves. They have personal timelines for goals that they want to achieve by a certain age. It is a very admirable quality but they must know that the conditions of the market may sometimes work against them.
Should this happen, bear in mind that there is no race. The important thing is for them to gain their financial footing without being laden down by debts. It is only then that they can build something big.
Is it advantageous for an individual to buy property?
Definitely, but this is only so if they can afford it. I would say that every individual should work towards buying their own property at some point. However, they must make sure that they are able to manage the payments comfortably.
If they cannot afford to buy a place in Kuala Lumpur, they can perhaps consider buying property in other areas. If they cannot afford a spacious landed property, they should settle for something smaller instead. The important thing is to break into the market.
Additionally, it seems to be a common trend these days for individuals to move out of their family homes later in life. While they live with their parents, the money they save up from not having to pay for rent or a housing loan can go towards buying their own place in the future.
Gen-Y seems to be faced with many obstacles when it comes to breaking into the property market. What can they do to ease the process?
They need to get themselves into the market even if it means settling for something that is not their first preference. If they cannot afford a property priced at RM500,000, they should buy something that is within their budget.
Contrary to popular belief, the property bubble is not about to burst anytime soon and property prices will not decrease in the near future. Gen-Y needs to be able to prioritise and determine which investments are more pressing to the betterment of their futures.
For example, it is better to own a small RM200,000 property compared to a big RM100,000 car. If they are married, do they need two cars or can they perhaps rely on public transportation? In order to make a big impact, it takes small calculated steps to get to where you want to be financially. Rome was not built in a day after all!
In your opinion, how can the government help Gen-Y in their struggle?
As it is in any country, whatever the government does is never going to be enough. It is not easy trying to please every segment of the market because the government has limited resources.
What I believe is the most important but overlooked factor is the need to inspire our youth. They need to see that there is hope and a sea of endless opportunities in Malaysia.
The youth must be able to see for themselves that there is an ultimate goal and efforts to get us there have already been taken. The prospects are bright if we only give ourselves a chance to see it. The media plays a huge role in conveying this message to the youth by showcasing the ‘what could be’ to them effectively so that they can envision themselves in 10 to 15 years.
In order for us to build the nation together, we must be able to visualise ourselves in tandem with the development of the country.
If you can form a mental image of something, it will be easier to accomplish. We need to stop complaining about today and work towards a better tomorrow. I truly believe that the possibilities are endless if we believe in our hopes and dreams.
What is your vision of Malaysia in 10 to 15 years?
Malaysia has a lot of opportunities and I believe in hope as I mentioned before. Projects such as Iskandar Malaysia and the High Speed Rail show us that steps are being taken to further develop our country. Good things come to those who wait and I think that with a little patience and faith we too as a nation will stand tall and proud among other developed countries.