There are three kinds of property buyers in Malaysia. First-timers who are really scared of buying because it involves a huge commitment (at the beginning, especially).
Second-time property buyers looking for an upgrade after staying in a 700 sq ft apartment for four to five years.
Then, there are those with properties, already having gained from it, and now looking to buy more below-market-value properties. (Just look at the secondary market for these attractive deals too, not just those from new launches).
There are also those who want to buy but cannot afford to – not necessarily because of the house price. It could be because they are expecting way too much i.e. close to their working place, huge in size and small in price.
So, the government must set policies in place to help genuine buyers as it cannot be left only to the property market to sort it out themselves.
Or, the government can build more affordable homes – HDB in Singapore builds all flats for qualified Singaporeans.
In an ideal situation, everyone buys properties corresponding to their earnings.
In reality however, there are those who need a home but cannot afford one and will forever be renting from seasoned and experienced buyers who would have purchased most of those affordable homes.
Yes, there’s also the issue of oversupply and unsold units plaguing the market currently.
This is made harder by the 30pc downpayment requirement from third-home purchases onwards.
So, a RM250,000 home would require a minimum of RM75,000 as a downpayment. To buy two of these RM500,000 homes, one would need RM150,000 in cash first.
Ever wondered why seasoned owners are so engrossed in saving more for downpayment? Yes, they have tasted the “sweetness” of income from rentals.
For first-time home buyers, it is extremely important that one has started on this journey of at least owning one’s home and not stuck continuously renting as that only makes house owners richer so they can buy even more units, and leave tenants always poor because the rental they pay will not be going into any downpayment for a home of their own.
As for those without a downpayment yet, there’s still hope.
Consider some of the Rent-To-Own schemes that have been made available in the market. It is true that the monthly “payment” carries a premium over rental but this will be part of the downpayment for the home in the future.
Don’t rush into it. Look around the affordable homes market as well as the secondary market. Consider unsold units and negotiate for extra rebates, renovation packages etc.
The property market is not as bad as depicted but one day in the distant future, it may be. So start planning now.