Younger Malaysians Aspire to Purchase Property Post-COVID
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Findings from the Malaysia Consumer Sentiment Study H2 2020 has shown that spending long periods of time confined in a house is waking Malaysians, especially the younger brood to get out and own a place they can call their own.
The Movement Control Order (MCO) gave families the opportunity to bond as the nation stayed at home to flatten the curve. While majority of age groups appreciated being home to spending long hours with their kids and families, the younger generation saw a purpose for something bigger in their lives.
For the millennials, giving up their carefree lifestyles of artisan coffee and brunch as they confine themselves at home under the rules of their loved ones may have evoked the sense of having their own individual spaces.
As working-class individuals, the millennials as well as renters saw the dire need of owning their own property as they long for their personal space during the MCO and this was affirmed with the findings from the Malaysia Consumer Sentiment Study H2 2020.
In the study, 51% of renters and 44% of those living with their parents would not delay property transactions due to COVID-19 and its impacts. These demographics also represent 47% of the majority of respondents who are from 22 to 29 years of age.
Also sharing the same sentiment are homeowners (37%) and investors (31%) between age groups of 40 to 60 years of age.
Strengthening this stance, respondents from lower income backgrounds (51%) are also less likely to delay their purchases, indicating continuing demand for affordable housing amid economic headwinds.
Sheldon Fernandez, Country Manager, PropertyGuru Malaysia says that industry players were trying to make sense of the pandemic and its impact on property as the market was uncertain in the wake of COVID-19 and the resulting Movement Control Orders (MCOs) in Malaysia.
“But looking purely at consumer sentiment, however, some patterns are clear. One of these is that extended, enforced time at home has perhaps made renters and younger home seekers more appreciative of the benefits of owning their own property.
Another point to note is that investors are on the lookout for purchases, though these demographics differ in their approach to purchase timing.”
Buying intent strong but financing remains weak among Millennials
The motivation to jump on the property bandwagon is strong and ambitious, however, Malaysians in general and even more the younger generation cite home loan financing, property viewings and information sourcing as key challenges in the property decision-making process.
The study saw aside from price uncertainty and delays in purchases, difficulties in viewing properties (52%) and challenges in securing home loans (41%) are the issues most frequently faced by Malaysians returning to their routines.
Though the intent to buy a property is strong, renters (46%) and those living with parents (51%) are most likely to have difficulty finding loans. Furthermore, 29% of respondents said that inability to obtain sufficient information on property was a common concern.
Fernandez said financing and affordability will naturally come under scrutiny as many Malaysians prioritise day-to-day survival in the face of a potential recession.
“For those with sufficient buffers to capitalise on current market trends, however, there is still room to improve in terms of uptake for programmes and tools developed to address these specific use cases, such as affordable housing and rent-to-own schemes, loan pre-approval solutions and virtual tours,” says Fernandez.
An interesting finding from the study showed that only 26% of respondents would refinance their home loans, despite a historically low Overnight Policy Rate (OPR) following a series of revisions by Bank Negara Malaysia and the possibility of greater cash liquidity for approved applicants.
In general, Malaysians are largely comfortable and confident with their existing financing arrangements.
And if given a choice, reducing associated costs such as valuation charges, legal fees and stamp duty would be the most preferred financing options instead, which could greatly benefit the younger homebuyers who are eager to own their own property but face financial constraints.
This article was originally published by PropertyGuru.