Disclaimer: In Real Life is a platform for everyday people to share their experiences and voices. All articles are personal stories and do not necessarily echo In Real Life’s sentiments.
Real estate has always been considered a valuable asset in one’s investment portfolio, for the short term, as well as long term. The affordability of it, on the other hand, is a different discussion.
Today’s world sees a competitive market in real estate. While many still deem real estate as an appreciating asset, millennials and Gen Zs nowadays rather rent than buy one. Here’s some reasons why:
1. There’s no way in hell they can afford it
The price for houses during our parents’ time was only in the 5-digit range, while today we look at the minimum of 6 in the city, maybe even 7. As prices continue to soar, a typical fresh graduate’s salary is still stuck at RM2,500 for over 10 years!
Worse, with the economic recession we’re facing due to the pandemic, there’s been a whopping 4% increase of fresh graduates taking jobs at RM1,000-RM1,500 per month due to the likely desperation to secure an income during such unprecedented times.
From bills, to paying off PTPTN student loans, Gen Z-ers nowadays look at a big percentage of their income and even savings being deducted by those. All of which are accounted for by a single person without a family of their own.
2. The younger generation appreciates excitement over commitment
With the younger generation being narrowed down to the only affordable purchase option of pigeonholes (smaller units, ~500sqft), it no longer makes sense to bank on settling for a smaller space long-term with a very high commitment.
Now that there is more supply than demand as the market is booming with options, the younger generation will naturally be attracted to the newer, nicer option. If the question was, to be tied down to the same house that will only get older for the next 30-35 years, or having the freedom to move into a new place any time for the price of hopping around, it’s safe to say that many will go for the latter.
3. Gen Zs do not like to compromise on their freedom
Buying a property means that they’ll likely be stuck working for the next tens of years because they have a commitment to pay off the loan. This puts them in a tough position where they aren’t able to make riskier decisions.
For instance, it’ll be much harder deciding to start their own company or take that 1 year sabbatical to travel the world as the loss of a stable income can be dire to them.
4. Gen Zs don’t want to be tied down to 30 years of debt
Fresh out of school and trying to build financial stability, the fact of the matter is that the younger generation would have had their first job with already a handful of commitments. It’s a tough world out there. The last thing they need is a longer, heavier commitment that further pulls them down the hole and maybe even puts them into debt.
Debt is many things but essentially it’s a burden above all. And to be in a position where you have debt stacked up on you, let alone being in your early 20s, it’s clear why the younger generation would want to stray away from that.
5. Gen Zs are pushing back on marriage and kids to later years of their life
Because of that, Gen Zs don’t, or rather, are forced to delay marriage and having their own family. It just adds to the already crazy cost that comes with adulting. Compared to the older days, it’d be getting a job, get married, then having kids as soon as you could. Nowadays, you’d be lucky to have enough balance at the end of the month to save.
As the younger generation doesn’t look to prioritize having a family of their own, this allows them to have the freedom to make personal decisions about housing in their own best interests.
6. There are so much more opportunities now
With the internet nowadays, it’s much easier to find and discover various job opportunities to take up. Many even consider moving out of Malaysia due to the weak currency our country unfortunately has.
With renting, the commitment to get up and move to Spain for that dream job of yours seems much more plausible, and Gen Zers thrive on such freedom.
Realistically, property purchases add to an already heavy load
Though the industry often increases its affordability rate for houses by offering huge discounts to offset purchases and whatnot, realistically, it doesn’t necessarily make it all that easier for young home buyers.
Renting seems to be the safer, more popular option among the younger generation, even though the Millennials can argue that having your own home gives you the luxury of deciding how you want everything under your roof to be.
Ultimately, with options being available almost everywhere, there are definitely ways for the younger generation to be able to afford houses – it’s just cheaper to rent in the long run rather than bank on properties to be cheaper, among other factors to consider. There’s absolutely no harm in renting in the long run, it all comes down to what you value more.
For more stories like this, read: 6 Things You Need To Know Before Buying Property in Malaysia and Personal Finance: How Easy Is It To Shore Up RM50,000 in Savings In Malaysia?
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