When To Buy Your First House – And When To Keep Renting

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It’s no secret that the property market in Malaysia is a complicated one. For first time buyers, it can be a slog to go through all the conflicting data you can find online. 

Here are some first-hand experiences from Joyce and David, two Malaysians who are seasoned house buyers, to explain the pros and cons of Buying v.s. Renting.

At what point in your life did you feel you were ready to buy your first house?

Joyce said, “Good question. It was a decision that I made with my partner before we got married.”

“We’ve been renting for 7 years. We wanted to take it to the next level in owning a place of our own, and had to be sure that we had enough combined earnings for monthly instalments.”

“At that time, we only considered what we could afford based on our salaries back then. We couldn’t even go for bigger units.”

“Sub-sale homes were out of the question because of the 10% down payment, which we didn’t have.For example, a RM800k house would need a RM80k downpayment.”

“So we opted for new developments where they could give us rebates.”

What are the benefits of renting compared to buying?

David says: “Let’s say that next year, a newer condominium sprouts up next door beside your house. You aren’t tied down to anything, so you can just move there. You’d get a pool, security, gym facilities, and the rent would be the same!”

Renting gives a sense of flexibility that owning a house would not. If you own a place, your monthly payments will become like a ball and chain to your financial freedom. 

Once you stop being able to pay your monthly installments due to job loss or accident, the debts will start piling up. It’s not uncommon for salaried men who take their own lives when they find themselves in debt and unable to pay off their loans.

Is it true that buying a house is a good form of investment?

David says: “Growing up, we’ve all been told one way or another that property is a good place to park your money. Not necessarily.”

“Not every house purchase will guarantee a return of profit. Buying a house for your own stay is always better than renting. But as a form of investment, not always.”

There are still people who are very traditional who think owning a house equates to financial stability. But David disagrees. For him, owning equals liability.

“If a fire manages to burn the whole thing down, what happens? You’ve lost. If someone decides to build a 10-storey building in front of you? Your property value goes down,” he said candidly. 

Joyce says: “Renting makes sense if one cannot afford to commit themselves to buy a place. They would then have the option to rent for cheaper.”

Buying a house for investment is the wrong mentality to set unless one has the holding power. That’s a risk one has to take.

What is the property market like right now?

David says, “If you ask me, now is a good time to rent. At the moment, supply is exceeding demand, so the property prices are stagnant. Therefore, rent prices are not going up either.”

The reason why there’s low demand is due to Malaysian salaries not going up to match inflation, remaining the same as 5 years ago. 

Lower salaries means that more people prefer to rent. Some are even more frugal, such as moving back in with their parents.

Since there’s fewer people in the property market, this drives prices down. For example, there are a lot of upper-scale apartments that are 50% empty because no-one can afford the high rents.

Is there a third option apart from renting vs. buying?

A friend of mine, Aidan, says he doesn’t need to think about buying his first property. 

“I’ll just take over the payments for my parents’ house. Right now, I’m paying for utilities, but in future, I plan to earn enough to provide for my mother as well.”

Many children in Asian households do this, as its part of the culture of filial piety, regardless of race. 

Sheng Ying recently got married to his college sweetheart. Rather than take a downpayment on a new property, his parents offered their old house – the childhood home he grew up in.

“Rather than spend time comparing properties, I’m glad I took over the home I had so many memories in.”

He lives with his wife and a dog, while his parents have moved to greener pastures, away from the hustle and bustle of the city.

There’s more than one way to stroke a cat, and similarly, there’s more than one way to be find your dream home. 

What are your thoughts on this? Do you plan to buy a house or do you prefer to rent? Let us know in the comments!

For more articles on property, read 6 Things You Need To Know Before Buying Property in Malaysia.

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