Property price is out of reach for the younger generation

Property price is out of reach for the younger generation

I do fear what will happen to the property price when my children have grown up and wants to buy a property

What about you? Do you have children? Do you also fear the same thing? Well, based on the younger generation of today, they already have difficulties in buying a property. There are many reasons and some of them are as below. My father thinks a Starbucks latte is too expensive. I agree too. Thus, I am now a ZUS fan. My children prefers air-conditioned restaurants. I don’t agree all the time. So I still decide to eat in normal kopitiam occasionally.

Every generation is different and I can already see why every time I visit a typical kopitiam, I see more people of my age versus much younger people or even teenagers. I will have to stay healthy and see what happens when my daughter and son has started to earn their own money. Would they still spend double by going to an air-conditioned place or save some money by going to the kopitiam? Time will tell. Now let’s look at what the younger generation are saying about buying their first property.

Article in nst.com.my In a study entitled, “The Variations In Preferences of The Young Generation In Klang Valley Towards Housing Property Demand’ conducted by UPM in mid-2022, Mohammad Mujaheed, who is also involved in the research said, today’s younger generation has high financial commitments.”

A total of 2,523 respondents aged 25 to 45 in Kuala Lumpur, Selangor and Putrajaya with individual monthly income of RM4,360 to RM9,620 were interviewed in the study aimed at identifying this group’s financial level, in terms of their ability to save, invest as well as their financial liabilities.

Out of the total, 1,697 respondents or 67.3 per cent were committed to monthly car instalments of between RM800 and RM1,200.

The study also shows that 1,833 respondents or 72.7 per cent have credit card commitments with at least two banks.

“Having a credit card is a ‘responsibility’ for the younger generation as an alternative for them to have regular access to credit and as cash advance.

“The study also reveals that 843 (33.4 per cent) of respondents were renting with monthly rental of RM500 to RM1,200.” Article in nst.com.my 

Let’s look at RM800 car instalments per month

To start, we look at the Top 10 cheapest cars we could buy today. Within these top 10 cheapest cars, the below would be the monthly repayment:

It ranges from monthly repayment of RM368 until RM781 and both are below the RM800 to RM1,200 which was stated in the survey. In other words, some of these buyers actually could have easily saved a lot of money by buying a cheaper instead. Maybe they think if they bought a more expensive car, people would see them higher up. Well, the only higher up would be the debt level yeah.

Let’s now look at the credit card issue

If you could NOT afford, then you do NOT buy yeah. Buying a new handbag to show off? or the latest handphone model so that you are seen higher up among your peers? After all these showing off, what happens next is that debt will accumulate and very soon there’s no way to clear those debts at all because there’s actually no end to showing off yeah. Keeping up with the trend is super tough and costs a lot of money too.

Finally, let’s look at the rental issue

Without savings from buying a cheaper car and savings from not simply spending on things we could not afford, of course there’s no way we could save enough for the downpayment for a home. Thus, one would choose to rent. There are many reasons why renting is better. In fact one often said one is that renting is way cheaper than buying as now the owners are under pressure to rent out their units at a lower rate than their repayment. Well, renting seems cheaper but renting is forever. Generations after generations would have to continue renting making the home owner richer and richer. Period.

It’s not about the younger or the older generation

It’s just the maturity of thinking. It’s also the ability to differentiate what’s needed and what’s really just a want. By the way, driving that Japanese branded cheapest car model does not mean one is more successful than the one driving a Persona yeah. It just meant that the owner of that Japanese branded car are willing to fork out more money for the car.

Maybe the Persona owner just could not afford a pricier car model. Well, if the person really could not afford, maybe better to buy a Viva or a Saga instead? Haha. Truth is, every 7-9 years, the Persona owner has an extra RM30,000 or more because of the car price difference which he / she paid. This is why some people have the money for a home downpayment and some always claim house price is too expensive.

I have many millennial friends who already own properties. I also have many friends of the same age group who until today does not own a property yet. One reason is that they have not yet found a perfect property at a perfect price. I always wish them all the very best. Maybe they will find one soon. I have moved home 4 times and will be moving again in June. I guess I have yet to find my perfect property. I will continue to look for it.

House price even in that country where most homes are built by the government?

In the country where most of the homes for the people were built by the government, the property prices are still moving up. Rental is also moving up. The government cannot dictate a fixed price whether rental or home price. Even the house price in the country which restricts foreign ownership to just new homes? Their house prices are also getting more expensive. Understand the facts yeah. When we look at all these more advanced property markets, we should already learn lessons from them. Malaysia cannot be the most special country in the world where the home prices stay the same forever yeah.

The best time to buy a property is definitely 20 years ago. The second best time to buy is debatable but the best price we can buy today is available today. Happy deciding.

Thank you for sharing this article for the benefit of more people.

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