According to PropertyGuru, first time home seekers and young renters between the age of 22 to 29 years old are prioritising the purchase of property as the Covid-19 outbreak enters the second half of 2020.
This comes as over 40% of respondents between the age bracket say they don’t plan on delaying property transactions. This is in comparison with 23% of respondents aged 60 and above.
Credit: PropertyGuru
However, even with all this demand, PropertyGuru says alternative financing programmes and digital tools still have room to grow to facilitate the rising demand.
Malaysians cite home loan financing, property viewings and information sourcing as key challenges in the property decision-making process. Some property purchasing platforms such as Mah Sing have embraced the shift to digitisation with an inclusion of virtual tours on their websites. This allows buyers to explore their options through these options without having to make a visit to the showrooms themselves.
Sheldon Fernandez, country manager, PropertyGuru Malaysia believes that “extended, enforced time at home has made renters and younger home seekers more appreciative of the benefits of owning their own property.”
With all that said though, buying property is a dream many do not see realizing. Housing in Malaysia is unaffordable and exceeds the price range of many regular Malaysians.
One of the reasons for this is that demand outstrips supply. There are not enough homes in the RM 500,000 and below price range to go around.
With all said and done, it is amazing that the government is offering schemes such as the Economic Stimulus Package and the six-month moratorium on financing payments to encourage demand for home ownership but this does nothing to fix the supply issues that makes it impossible to buy a house.
“Financing and affordability will naturally come under scrutiny as many Malaysians prioritise day-to-day survival in the face of a potential recession.” said Fernandez.
Day to day survival is borne out in the statistics as Malaysia’s savings rate has reached a two decade low of just under 25% in March 2020. This is in comparison to the peak savings rate in March 2011 of above 35%.
Wage growth also varies across the board as Median employment income for younger workers grew at an annual rate of 2.4 percent, compared to 3.9 percent for those 40 to 49 years old over the same period.
As youth wage stagnation rises, it is a no brainer that a lot of us are finding it hard to take on the added burden of home ownership. “Those on lower wages spend their income to pay for essentials – rent, transportation, food – and in the end, they find not much is left for the month.” as noted by Domestic Trade and Consumer Affairs Saifuddin Nasution Ismail.
Furthermore, despite a low unemployment rate of around 3% in Malaysia, Statista reports that the unemployed are generally young people, both graduates and non-graduates, who have had trouble entering the job market. This comes down to many firms wanting experience in entry level jobs, discouraging young people from applying in the first place.
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