PETALING JAYA, 5 APRIL: First-time home buyers, especially the younger generation, need to manage their home ownership expectations in line with the changes in employment trends, technology and affordability.
“Today, the barrier of entry for people to buy houses is higher. In the past, they only started to consider buying properties at a later stage in their career or after five to 10 years of working but today, within three years of starting work, people expect to buy a house already,” said Rahim & Co International Sdn Bhd research director Sulaiman Akhmady Mohd Saheh.
“That is ambitious and very good, it shows that the market is more aware also because of the digital age with all the social media, communication, mindset change and moving towards converging into one idea of ‘let’s buy a house now’. But I think buyers, especially the younger ones, should be a bit more patient and go for smaller units if you were to enter the market because that particular unit will appreciate as well,” he told SunBiz.
In the past, Sulaiman said, some buyers would opt to buy houses that are a little more expensive based on the assumption of salaries increasing but with today’s employment trends, this assumption may not apply to all purchasers.
Over the past few years, retrenchments have been happening, especially with the dip in global oil prices, resulting in many businesses cutting costs while more and more people are choosing to be entrepreneurs, hence the lack of stable income, at least for the initial period.
“Right now with the employment pattern of the younger generation, there’s a lot of people moving jobs; uncertainty, freelancing and what not. That’s why bank loans are very hard to obtain because banks can’t see the income, the Employees Provident Fund and the security of giving out loans to those buyers,” said Sulaiman.
However, buyers today can still afford properties in the RM200,000 to RM300,000 range, assuming they have already saved up for a downpayment.
“If you are in the market to buy RM200,000 to RM300,000 property in Kuala Lumpur, you can still get it but it will be old stock (secondary market). For new products, the supply is just not there. Subsale prices are climbing quickly, so you probably have to go for an apartment. You may not be able to buy a landed home but you would at least have a footing in real estate, with opportunity to upgrade later,” he said.
Sulaiman believes that the Rent-to-Own (RTO) scheme under the 1Malaysia People’s Housing Programme (PR1MA) will be more prevalent now as the market moves towards a situation where many can only afford to rent first.
With affordability issues still plaguing the housing market, he expects PR1MA to be more aggressive in marketing its products and believes that the RTO scheme will pick up traction this year.
“It (PR1MA) thought it would not need to market its products as those who need it (affordable housing) would approach it but it seems that education is still required. PR1MA needs to educate people so that they realise what they actually need and the opportunity that PR1MA is providing them. I think PR1MA already plans to do more public engagements,” he added.
PR1MA’s plans to promote its RTO scheme is in line with Bank Negara Malaysia’s suggestion to develop a thriving rental housing market to counter the issues of affordability and lack of affordable housing supply. – The Sun