Key Considerations Before Purchasing Our First Property

Categories: ABCs of Property Investment, New Home Related

Key Considerations Before Purchasing Our First Property

I purchased my very first property, an apartment of 730 sq ft way back in 2003. It was RM123,000 then and nowadays, the same property is around RM280,000. (As per latest listing in propertyguru.com.my below). I sold it some time back at RM250,000. So, I think I sold it at a very good price at a very good time too. Today, let’s talk about the few key things to be done prior to purchasing our first property.

Interior view of an apartment featuring a dining table with chairs, a kitchen area, and a living room space with a television unit. — Source: propertyguru.com.my

If you are waiting to buy your first property, here is some homework you should be doing first. Else, please do not say that we are looking to purchase the first property yeah. So, what should we do while waiting for the right property to come along?

#1 Read, analyse and understand the facts

Over time, property prices have generally increased in many markets. Inflation, population growth, economic development, construction costs and demand for housing can all contribute to rising prices.

Look at the property my parents bought in Ipoh or the first property I bought in Penang. Property prices can change significantly over the years.

However, let us be realistic. It is not true that every property will always increase in value. Some locations outperform others. Some properties remain stagnant for years, while others may lose value.

According to the National Property Information Centre (NAPIC), Malaysia’s average house price was approximately RM490,376 in the first half of 2025, with annual growth of around 0.7%. The national figure does not mean every state or property performed equally well. Kuala Lumpur, for example, recorded a decline in its house price index over the same period.

This is precisely why we need to read, analyse and understand the market. Do not simply assume that buying any property will make us wealthy.

#2 Where is our target?

Greater Kuala Lumpur is huge. Penang has both the island and the mainland. Johor has Iskandar Malaysia, while Kota Kinabalu, Melaka and Ipoh each have their own property markets.

Have we identified the areas where we would like to buy?

We do not need to know every neighbourhood in Malaysia. Start with two or three areas that suit our needs, budget and lifestyle.

Then study them. What are the typical transaction prices? How much is the rental? Is there demand from owner-occupiers or tenants? What public transport, schools, hospitals and employment opportunities are nearby? Is there too much competing supply?

The more we learn, the better equipped we become to recognise a reasonably priced property.

If we can find very little reliable information about an area, perhaps we should investigate further before committing our hard-earned money.

And remember, a popular area is not automatically a good investment. The price we pay matters too.

#3 Show me the money!

Some people believe we should calculate our budget before deciding where to buy. Others prefer to choose the location first.

Actually, both are important. We need to balance what we want with what we can afford.

For example, if our preferred area has properties costing RM600,000 but our finances only support RM400,000, we have three choices: save more, look for a smaller unit or consider another area.

My suggestion is to prepare a substantial cash reserve before buying. A down payment of around 15% is a useful planning target, although the actual amount depends on the financing package and eligibility.

For a RM400,000 property, 15% is RM60,000. But that is not the end of our expenses. We must also budget for legal fees, valuation where applicable, moving costs, furnishings, repairs and renovations.

First-time buyers should also check whether they qualify for current incentives. For example, the Ministry of Finance’s Budget 2026 tax measures provide for an extension of stamp duty exemptions for eligible first residential homes priced up to RM500,000, for sale and purchase agreements executed from 1 January 2026 to 31 December 2027, subject to the applicable conditions.

Do not assume you can afford a property simply because the bank approves your loan. Keep an emergency fund and make sure the monthly instalment remains manageable even if expenses rise.

Savings are the key to preparing for property ownership. Buying the right property may then become one part of our long-term wealth-building journey.

#4 Show me the unit!

If we dislike the area, why waste time viewing the property?

Once we have shortlisted suitable locations and established our budget, start viewing units. We should not rush into buying, but neither should we wait until we know everything before stepping out to see the market.

View different properties. Compare their layouts, conditions, facilities, prices and surroundings. A more expensive unit does not automatically mean it is the one we will prefer.

Perhaps our first viewing takes place today, but we only find the right property three months later. That is perfectly fine. We are learning along the way.

Bring our partner or family members along if they will also be living there. A property may look great to one person but be unsuitable for the household.

Most importantly, inspect the unit carefully. Check for defects, water leakage, maintenance issues and anything that may require substantial spending after purchase.

What happens when we complete these four steps?

We will be in a much better position to say that we are genuinely preparing to buy a property, rather than merely dreaming about it.

Of course, once we find the right unit, we still need to secure financing. Compare loan packages, understand the effective interest rate, fees, lock-in conditions and repayment obligations.

But if we abandon a property that meets all our requirements simply because another bank offers an interest rate that is 0.5 percentage points lower, perhaps we need to reconsider our priorities. The difference matters, but so do affordability, location, price and suitability.

The objective is not to buy a property as quickly as possible. It is to be ready to buy the right property when the opportunity comes.

Happy REALLY waiting to buy a property, and not just dreaming about it, yeah!