
Property prices in urban areas such as Penang and Kuala Lumpur rose by up to 40 per cent in 2010. — propertymalaysia.my pic

KUALA
LUMPUR, Feb 15 — The sight of newly-built condominium units right down
the street from where he lives irks 24-year old Keoh, who says they are a
symbol of something which he cannot afford.
The young man, who only wanted to be known as Keoh, carves a living
as a fish trader and scoffed at the development within his neighbourhood
in the fishing community of Jalan Bagan, Sekinchan. Costing RM500,000 a
unit, he says the condominiums are an eyesore to him and those in his
community.
“I stay with my parents. I work everyday, going to Perak in the
morning to get my supplies of fish and drive a truck back here. But what
have I got to show for it? I cannot afford to even buy a home in
Sekinchan,” he told
The Malaysian Insider.
“Even prices here are rising, and we are still earning the same. I do
not think that any of my neighbours can afford a condominium like the
one at the end of the road,” he said, adding that earning a monthly
income of less than RM2,000 a month did not leave him much choice other
than staying with his family.
Young adults, who are putting off buying a house, citing property
prices as the underlying cause, are reflecting a growing trend.

Keoh says he cannot afford a home even in rural Sekinchan — Picture by Jack Ooi
Property
prices have not been used as an election issue in the past but both
coalitions have begun to realise its potential impact on young adults,
who represent a sizable chunk of the country’s electorate.
The National House Buyers Association (HBA) last year warned that an
entire generation of young adults risks being locked out of the property
market due to runaway house prices.
Keoh previously lived in Subang, Selangor and worked as a mechanic
for two years before financial constraints and family obligations
brought him back to his Sekinchan hometown.
“I came back to help out the family business. Staying here, you’d
think that the cost of living would be cheaper, but it is quite the
opposite,” he said.
Twenty-seven-year-old Phillip Tay shares Keoh’s frustration. A
biotechnology graduate-turned-marketing executive, he cuts a decent
picture of the average middle-class graduate with a stable job and his
own car.
“But the reality is, I cannot afford to purchase my own home. I live
with my parents. After paying for monthly essentials, all I am left with
is a little bit of savings.
“I think this is a frustration shared by many of my peers. We have
jobs, some even professionals, but prices keep getting higher. We pay
bills and more bills, and once we’re done with that there’s not much
money left,” he told
The Malaysian Insider.

Tay is staying with his parents like many of his peers due to the cost of property. — Picture by Shazwan Mustafa Kamal
Tay
believes the root problem lies in stagnant wages versus an increasingly
high cost of living, which is in turn reflected in the price of homes.
“What the government can do is to come up with policies that can help
address the issue of stagnant wages. Prices are going up but wages
aren’t. I’d vote for a government which can look into that,” he said.
Accounts executive Rachel Tan says that young adults today are so
debt-laden that it becomes impossible for them to even think about
owning property.
“Young working adults are stuck right now, there’s poverty of a
different kind. There’s a lot more debt at this age ... someone my age
already has so many loans to repay even before they can own a home, once
they get out of university,” said the 23-year old living in Subang
Jaya.
For pharmacist, Balqis Mohamad Zin, working with the government
provides a better sense of financial security compared to working in the
private sector.
But she too, like many others, is concerned about her future amid ever-rising living costs.
“The cost of property is very high, especially in urban areas. The
cost of living worries me. Currently, I still get family support, but
what if I get married in the future? What I am earning right now will
not be enough.
“I am thankful to be employed, I know some people who are still
unemployed after graduation. But where is my future from here?
Financially I am concerned,” said the 25-year old.
Prime Minister Datuk Seri Najib Razak, in an attempt to address the
issue of unaffordable property, introduced the 1 Malaysia Housing
Programme (PR1MA), an affordable home ownership scheme late last year.
Najib initiated the first phase of PR1MA in July, which involves the
construction of 42,000 houses on 20 strategic sites. Each unit will be
sold for between RM150,000 and RM300,000 depending on location and size,
and targets first-time homeowners with a household income of between
RM2,500 and RM6,000.

Yanti told The Malaysian Insider, “The realistic choice is to live with my family.” — Picture by Jack Ooi
The
scheme is a continuation of the prime minister’s attempt to tackle
soaring property prices in urban centres following the My First Home
programme launched in March last year which caters to lower-income
households with a budget of RM220,000 and below.
Not to be outdone, the Selangor Pakatan Rakyat (PR) government
launched a Selangor affordable housing scheme last year offering
apartments priced below RM100,000 to those who earn a monthly income of
between RM2,500 and RM5,000.
But despite the vast array of affordable housing schemes available,
the root problem of the high cost of homes still remains an issue, and
looks set to prevail in the future.
There is also concern that low-cost housing schemes will have stigmas
attached to them and therefore will be less attractive to homebuyers.
Property prices in urban areas such as Penang and Kuala Lumpur rose
by up to 40 per cent in 2010 fuelled by low interest rates and a surge
in speculative buying, although prices grew slower last year due to
dampened sentiment from tightening measures such as a hike in the real
property gains tax for early disposals.
Some reports have also estimated that property prices jumped from 5.9 times income in
1989 to 10.9 times in 2010.
The Demographia International Housing Affordability Survey rates
markets, whose property prices are 5.1 times median income or more, as
“severely unaffordable”.
The House Price Index (HPI), as prepared by the Valuation and
Property Services Department, rose 7.5 per cent in the second quarter of
last year as compared with the same period in 2010.
For urban centres like KL, to which young working adults are
gravitating, the HPI has seen a rapid increase since 2004, growing
relatively slowly from 100 in 2000 to 108 in 2003, before rising sharply
from 115 in 2004 to 167 in the second quarter of last year.
“The prices are exorbitant and beyond the reach of young adults,” HBA secretary-general Chang Kim Loong told
The Malaysian Insider
last year. “The price increases are not commensurate with salary
increases. How are young adults going to catch up (with house prices)?”
“It’s simple math. The combined income between me and my husband does
not even amount to RM3,000 ... the realistic choice is to live with my
family. Cheaper costs.
“For me, I will vote for a government that will continue to provide
aid, to help us. It’s difficult living when everything has a price,”
Yanti, a cook from Sekinchan concludes.