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94 percent of millennials buying a home within 5 years!

Are you a millennial looking for a property currently? There’s an interesting article in theedgemarkets for your reading. HSBC Holdings Plc conducted a study called “Beyond the Bricks” in which more than 9,000 people were polled in Malaysia, Australia, Canada, China, France, Mexico, the United Arab Emirates, the UK and US. Those polled are millennials (those born between 1981 to 1998). Both my brother and sister are within this group. I am generation X lah. From this poll, HSBC Bank Malaysia Bhd (HSBC) head of retail banking and wealth management Lim Eng Seong shared that there will be a huge demand for within the price range of RM400,000 to RM500,000. He said, “More people in this group will be more willing to buy houses in the outskirt areas with improved infrastructure going forward.”  ( I think he is talking about the MRTs and the LRTs and not just expressways) Do remember that buying further away also mean that we must be ready to accept lifestyle change. Do not buy if you are not ready to stay and hope someone would buy it from you instead.

According to the study, 35 percent of Malaysian millennials already OWN their own homes. This includes both my brother and sister. The remaining 65 percent who has yet to own a home intends to buy one within the next 5 years. In other words, within 2017 – 2022, they will buy a property! By the way, the global average for millennials owning a home is 40 percent. So, Malaysia’s millennials are below average. Three main reasons millennials find it hard to buy a property includes slow salary growth, rising property prices and not saving enough for a deposit. Lim added, “Improved infrastructure opens up the cities and therefore the cities are able to spread out, and as they spread out, the supply of landbank will increase significantly and exponentially.” He also shared that should more homes priced at RM500,000 and below are built, the ownership would grow further. For those who are aiming to buy one, the study has identified four measures that millennials can take to help make their home ownership dream a reality: plan early and do not underestimate the deposit required; budget beyond the purchase price; consider what sacrifices one can make; and get a full view of your finances.

Assuming the study is very valid, the demand is likely to be huge? There are an estimated 12.6 million Malaysians between the age of 25 – 54. (Source: Indexmundi)Just assuming 30 percent of this group to be millennials would mean 3.8 million. 60 percent of them are without a home and this would be 2.3 million. I think the current number of affordable homes may need to be a bigger number. Anyway, do note that some other studies are saying that these millennials no longer wish to own a car or a house. Young people will stop buying cars and houses? Noted…  Please be reminded that most of these millennials would not be your RM600,000 property target. They would be those more likely to be queuing up for a new apartment of 850 sq ft and priced at below RM400,000 instead. Happy following these studies and believing the one more applicable to your investment journey.

written on 27 March 2017

Next suggested article: Grow money with money. Boost your ego? Laterlah

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kopiandproperty.com is everything about property related writings and news. Enjoy reading with a latte.

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