Graphic Organizer (1) – Housing dilemma among young starters in

Malaysia

The Skim Rumah Pertamaku (SRP) or My

First Home Scheme of owning home first time
was launched in Malaysia
Under the same scheme the young starters
are offered a house range from RM100,000 to
The Incentives by the RM400,000
Government look out for a realistic housing policy
Resolve the issue of bubble pricing and
speculative of house pricing
Increase the basic household income towards
a high income nation

A lot of housing ads touting their slogans

(ex:'the place to be' , 'paradise on earth' , the
home of your dream').
The Housing Developer's Housing ads focuses on spartial relations
Promises and 3-D images of house with several
promises and return of investment

The housing loan take out 30-40% of their

household income.
Cause of the housing Increase in housing loans
dilemma among the Housing prices beyond sustainable levels
youngsters Higher montly commitment
Financial burden

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 Graphic Organizer (2) – Youngsters in Malaysia struggle to buy
house.

Cheryl Fatimah Zakaria Chang Kim Loong

K.T.S. Chua Withaneachi
(Single mother) (National Housebuyers
(Fresh Graduate) (Lecturer) Association( HBA)

Higher Reason Three main criteria:

monthly Exorbitant Any single loan repayment
house and Increasing
repayments expensive should not exceed a third of
and apartment the borrower's income
prices properties
qualifying for All combined loan
the housing Fluctuating repayments should not
loan intrerest rates exceed half of the borrower's
from bank income
Youngsters Reduction of loan The price of the house ideally
Increasing living years should be three times the
safe to stay
costs of borrower's annual household
with their
transportation income.
parents until Youngsters
and housing
they stable struggling to
and move pay their
out their own instalment Staying with their parents
until both the parents and
the child (borrower) have
The saved enough money for a
Housing price combined larger down payment
is more funds allow
compared to for more
their salaries flexibility to
buy a house

Parents withdraw
their own EPF funds

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 Graphic Organizer (2) – Youngsters in Malaysia struggle to buy
house.
Shamsuddin Bardan
(Malaysian Employers Bank Negara Malaysia
Federation (MEF)
executive director)
To earn higher salaries so
that the downpayment
and monthly payments
become more affordable.
Take time to commit a
long term financial
obligation.
ARGUMENTATIVE ESSAY
Property loans are capped
at 35 years while personal
loans are limited to 10
years to help reduce
household debt in the
country.
Tackle household debt will also
be extended to all financial
institutions
Limited impact on the
property market
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During this new era of human evolution, housing issue has become a very serious concern
in every corner of the world as the living standard of people’s achievement represents a
country’s prosperity. Nowadays the increase in population in our country has also accelerated
the demand of housing issues especially among the younger generation. More and more people
are buying houses as an asset and as a basic necessity. As the new generation progress and
their economy capability becomes stable , they automatically tend to have good income. This
might give them the urge to buy house for themselves which cause the housing rate to increase
drastically. The new generation is facing a big dilemma when it comes to the payments for the
property. This has always been a pain in the neck for the youngsters especially for the fresh
graduates.

Those who are buying house for the first time, especially those from the younger
generation and those from lower and middle income family, constituting about 50 percent of the
Malaysian population, are not able to purchase their own property today, according to the
National House Buyers Association of Malaysia (HBA). According to Yusof and Razali
urbanisation and industrialisation are the main factors that pushed up the demand of
housing in the urban areas, especially from the lower income families . Based on the
graphic organizer (1) and (2) there are several reasons and causes behind this dilemma. First
and foremost, the main reason for our youngsters to be push to this situation is the low interest
rates have led to substainable increase in housing loans and housing prices beyond sustainable
levels especially in Klang Valleys. Moreover, the housing loans among the young starters take
out almost 30-40% of their household income which only gives 60% as the left over which is still
considered not enough to survive in this world.In my opinion I think that having this 60% left
over of income is just not enough for the youngsters to breath in this world.They cannot manage
to save any portion for their future which lead to a lifecycle where they earn to spend not to save
for their rainy days.

Futhermore, with their 60% income youngsters are also being pressured with other
monthly commitments and financial burdens. Managing their incomes within the 60% to pay
off their monthly commitments such as transportation, food, hidden cost of tolls , fuels ,credit
card payments, car loans and also utilities will always be a haywire . Based on the Graphic
Organizers (2) with increasingly expensive properties, flucturing interest rates from banks.
Looking at it from the positive side, buying a house at young age can be an advantage where
they can enjoy a longer financing period. The longer term financing is taken; the amount
pay for housing loan can be a small sum. But as the current situation the reduction of the loan

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years are being one of the cause for the youngsters to be cornered in this dilemma. As the
youngters who are having a very shallow knowledge upon this financial topic will tend to have
weak financial management which will lead him to a debtful life where he have to earn to pay for
the debts. Nowadays,living expenses are increasing day by day where the youngsters are
struggling to balance their financial life and their savings.

The housing loan and the price are more expensive especially landed property
compared to their salary especially for those fresh graduates who are just being push to the
working world and beginning to walk in this new financial environment. Affordability remains a
major concern due to high prices of existing properties and the lack of supply of
affordable and well located properties within urban centre. The most important factors
influencing housing affordability are price, location and population’s socio economic
environment. For an example, the price of the houses are different when they are in the outskirt
and at the middle of a place. This difference in the pricing are due to the facilities in the main
places . Based on the Graphic Organizer (1) the housing developer’s promises are also being
one of the cause for this dilemma to take place. The advertising evokes a set of myths and
portrays an ideal than a reality. The first time house buyers are not assumed to live up to the
claims of the advertising, nor they can reflect on what they could afford .As an effective way to
curb and overcome this housing dilemma it is very important for the younger generation to make
pre-planes before making any move. For an example, it is safe for the youngsters to stay with
their parents until they stable and move out their own. At this point, they can manage to cut
some cost. Staying with their parents until both the parents and the child as a borrower have
saved enough money for a larger down payment.

Based on the graphic organizer (2), youngsters should spend some of their time to read
newspaper to get the informations about the financial management advisors by the wiser people in that
particular field. Property loans are capped at 35 years while personal loans are limited to 10
years to help reduce household debt in the country. Youngsters should always do a mini
research about the loan issues so that they could get to see the positive site of them. Moreover,
youngsters should tackle the household debt which will also be extended to all financial
institutions. On the other hand, youngsters should also work harder in order to have a higher savings .
To earn higher salaries so that the downpayment and monthly payments become more
affordable. As it is mentioned before this, the youngsters should take time to commit a long term
financial obligation so that they could complete paying their debt without rushing.This could also
even the youngsters from getting housing stress. Therefore, based on the graphic organizer

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(2) the government needs to look out for a realistic housing policy that enables young starters
and potential first time house buyers to own or rent a house according to their financial
capability and their financial planning. The government should also take effective steps to give a
convenient solution for the issue of bubble pricing and speculative of house pricing which might
lighten the young starters burden.

As a conclusion, efforts and measures towards better understanding of housing

demand among the citizen especially among our new generation should be given enhanced
awarness in the early stage ,in order for them to do pre-plannings for their future. Our coming
generation should act smart enough to survive in this world by thinking rasionally from all
aspects before making a decision. They should broaden their knowledge in fields such as
marketing, finance, saving, banking, economy and investments. This might lead them to a well
planned and also should be followed by youngsters in generation and generations to come.

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REFERENCE

A.A.Bujang. (2015). Measuring the Gen Y Housing Affordability Problem. International Journal of Trade
and Finance, 1-5.

AR, Z. (2014). Malaysia rises in economic freedom index but corruption a worry - See more at:
http://www.themalaymailonline.com/malaysia/article/malaysia-rises-in-economic-freedom-
index-but-corruption-a-worry#sthash.bDC1yT8P.dpuf. KUALA LUMPUR: Malay Mail Onlilne.

A.M. Yusof and A. Razali, “House price discovery in Malaysia: A a.preliminary analysis,” presented

at the International Real Estate

Research Symposium (IRERS), Kuala Lumpur, Malaysia, 2004.

Chin, C. (2013). Young professionals in Malaysia struggle to. MALAYSIA: The Star.

Goh, S. (2015). The problem of unaffordable houses. KUALA KUMPUR: Malaysiakini.

Ismail, D. S. (2016). Adequate housing dilemma in Malaysia: A human rights perspective. Kuala Lumpur:
Malay Mail Online.

Zairul M, M. (2013). Housing dilemma among young starters in Malaysia. Elixir International Journal, 1-4.

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ATTACHMENTS