Young Malaysian graduates rushing to buy homes out of fear
Fresh graduates feel compelled to buy property quickly because they fear prices will soon outpace the growth of their income, said Khazanah Research Institute director of research Dr Suraya Ismail.
“Young people used to rent for 10 years before deciding to buy a home. However, graduates today rush to buy their first homes, for fear of rapid price escalation. They think that if they do not buy today, they will never be able to afford a house.”
She explained that this places fresh graduates under stress because “they do not have the confidence they can earn an income and fall in the middle income bracket,” she said at the National Real Estate Convention (NREC) 2015 on Thursday.
Suraya was part of the panel discussion, ‘Homeless Graduates: Reality or Myth?’ on challenges faced by young, aspiring homeowners in purchasing their first homes.
Her fellow panelists include Rahim & Co International Property Consultant Bhd founder and executive chairman Tan Sri Abdul Rahim Abdul Rahman, PR1MA assistant vice president for research and development, Ezlina Adnan, and Bank Simpanan Nasional (BSN) senior vice president and head of distribution, Akhzan Zaini.
Rahim said fresh graduates were facing a hard time buying their first homes due to the huge disparity between current average household income and property prices.
Suraya said the disparity between income and house prices is a complex matter.
“It is not as simple as increasing income to enable graduates to purchase homes. It is very difficult to increase income, especially if we’re not increasing productivity.
“The job market feeds into the housing market; for example, a labourer may be incur both consumption and production of a house,” she added.
According to Suraya, one way of slowing the growth in housing prices is to increase the productivity of all sectors, especially the construction sector.
“Something has got to give, and house prices should go down. We believe that the level of profit before taxation could go down, although we won’t be able to achieve supernormal profit,” she said.
Meanwhile, BSN’s Akhzan advised graduates to be realistic in applying for housing loans.
“You may not be able to purchase a home in the RM300,000 category if you are earning RM3,000 a month. For BSN, we do offer 100% loans for homes that are below approximately RM130,000.
“Graduates should look for homes within their means. If you go beyond your means, bankers will look at your repayment capability, therefore you may have a smaller chance in getting your loans, approved,” he said.
Akhzan said that BSN has approved 335 of 800 applications under the Youth Housing Scheme so far.
For affordable housing, PR1MA is doing the best it can to provide homes for the masses and young graduates, said Ezlina.
“Our goal is to build 500,000 homes by 2018. There are currently 60,000 units on the ground. Based on Budget 2016, our goal is to set house prices below market price.
“What we do is to always evaluate [our projects] on a case-by-case basis. Our projects are based by state, and the products we have,” said Ezlina.
She added that PR1MA is expediting completions by using industrialised building technology. This will lower the cost of construction, which should allow for lower home prices.
The panelists concurred that the government’s affordable housing initiatives should be streamlined under one ministry that handles financing, planning, land acquisition and construction of the homes.
Source: TheEdgeProperty.com.my
Fresh graduates having hard time finding a decent paying job, let alone buying a house.
Pity will bring you no where. I know fresh grads who found good jobs as well as those who can’t get one. It’s all up to the individual. Good degree, good results, plenty of good job offers. Lousy degree with lousy results, who want to hire you?????
Some pitiful people really easily took offence at other’s username; these are the one to be sympathized.
Also, not all high-flying, straight-A’s students end up being successful in life. Plenty of examples where many were either school dropouts or underperformers. That said, graduates with lousy results are also human who need to work to earn a decent living. No need to bash these grads la.
@penang_kia
No bashing intended. My point, should never ask for pity, it makes you soft. When you talk about fresh grads, you’re not even talking about success yet. A fresh grad having a 6k pay a month job is not successful yet, that’s only the start. Anyway, let’s not dwell on this “pity” thing, waste of time.
I have come across people who don’t do well in life, and it’s never their own fault, always the gov’s fault. That’s wrong. Can’t move forward with that mentality.
However, we have to recognize the fact that in a society, you will always have the haves and have-nots. Can’t avoid that. A good system has to be put in place by the gov so that the haves do not use their extra resources to push the have-nots into a corner. Simple.
@SelfPity
I have come across people who don’t do well in life, and it’s never their own
fault, always the government fault. That’s wrong.
A good system has to be put in place by the government so that the haves
do not use their extra resources to push the have-nots into a corner.
Firstly, don’t do well in life blame the government is wrong. The second
paragraph is a good system has to be put in place by the government.
What are you trying to say ? I don’t think you know what you’re saying,do
you ?
@SelfPity
If straight A fresh from graduate student having a good result is a path to be successful for sure, then, the world is going to be full of millionaire, let me tell you, there are a lot of business man out there not even have a degree or highly educated but they become the employer of those educated people who work for them, please think twice if you think that high education is equivalent to success, then is so pityful with this kind of mindset.
Lastly, i do not refuse the importance of education but it is just one of small criteria to be success. my 2cents.
@Island
If you think I don’t know what I’m saying, that’s because you don’t know what I’m saying.
If you don’t know what I’m saying, well, who can you blame? …:))
@James
*sigh*. Still harping on this PITY thingy??
Haha…I think you’re way off and you need to get your focus back on the main topic.
The title of the artilce is “Young Malaysian Graduates…buying homes….”.
We’re talking about buying 300k homes here, not about Bungalows, super condos, seaside villas etc. So there’s no need to talk about millionaires with or without degrees. We’re only talking about decent paying jobs.
“PityMe” said fresh grads couldn’t get decent paying jobs to buy a home, and all I’m trying to say is that NOT ALL fresh grads couldn’t get decent paying jobs. There are a large number of fresh grads who could get decent paying jobs, with some getting fabulously paying jobs. That’s all it is….:)) Hehe…difficult to understand is it?
@SelfPity
“I have come across people who don’t do well in life, and it’s never their own
fault, always the [government] fault. That’s wrong. A good system has to be
put in place by the [government] so that the haves do not use their extra
resources to push the have-nots into a corner”. @SelfPity
If they don’t do well in life is their own fault but not the government so why
need a good system from government ? Why blame the government if they
can’t make it ? It’s their own fault.
If you can’t understand blame it on the government or yourself ?
@SelfPity
Despite the title, the very first sentence mention “Fresh graduates feel…..”
What’s so good about staying island anyway, traffic jam and illegal parking everywhere, two way road become one way, penang car dont give space even when people want to turn, very bad and selfish driving attitude , the motorist is worst , always hon even road is straight and no car like its their grandma road, drive motor all back side mirror spoil or not properly configure, drive straight like a tree, even kl is better in term of morality of penang driver, i know bcz i live both…penang high density place with kampung road , 2million plus population with 70% same road structure 15 year ago with half population back then, don ever come out when rain , can take u hour jam…go figure why rush buy house with overprice and over 1000 unit affordable hs at 300k ? Else those old 15 year house that sell at 300k at 700sf yish ? can imagine one hs 2 car hw is the road outside guardhouse ? Not like here got super high paying job moreover underpaid , is true….some reality check only guys
Agreed, condo everywhere high population with poor road access , not so good to live at all …..transport system and road need immediate improvement