The struggle is real. Home buying for millennials is beginning to be more than a livelong commitment. The issues that plague them are many, but these below are some of the most crucial that needs to be addressed.
Affordability
When the cost of living is increasing but the people’s salaries are not keeping up, surviving in itself, especially in the city centre, is beginning to pose serious issues. Living on a hand-to-mouth basis is fine on a basic salary, but not when it comes to buying a home.
In fact, many people are resorting to getting a secondary job, using their live savings, or even getting help from their parents to afford their first home.
What is really needed are homes that cost below RM350,000 in the market.
Upfront Costs
Upfront costs are another big burden on millennial home buyers. Even with all the discounts that are now being doled out by developers, millennials can ill afford the many fees. The booking fees themselves are usually a stop point for millennial property buyers, and even if the amount if low enough for them to afford, they then have to fork out money for the lawyer fees and documentation fees. Only the rare and few developments will have a package that millennials can truly afford.
Credit Scores
Credit scores are another issue that both authorities and millennials need to look into. From the side of the authorities, they need to look into allowing home loan borrowers to take a loan based on their gross salary rather than their nett salary. From the millennials’ side, they need to ensure that they pay their credit card bills on time to have a clean credit score.
Unfortunately, it is altogether too common for millennials to have monthly salaries just below the required amount to obtain a loan. And also unfortunately, it is altogether too common for millennials to have bad spending habits, which result in them overspending and running up their credit card bills – resulting in a bad credit score when they cannot make their repayment on time.
Millennials therefore need more affordable homes.
Ongoing Expenses
This is another issue that plagues millennials. Even if they can afford their first home, many find the cost of up keeping the property difficult. Maintenance fees for strata titled properties have to be taken into account, especially if it sits on commercial land. Then there is also the monthly utility fees and instalment fees.
Add the cost of all these fees to a monthly expenditure that already includes a car loan and possibly a study loan, and many millennials are afraid to even consider buying a property.
There are however a few selected developments that are affordably priced with low maintenance fees.
Unrealistic Expectations
Having unrealistic expectations of what a certain price range can get them is also another problem of millennials, much like the unrealistic expectation of what a fresh graduate’s pay should be.
While there are affordable developments that are located near water theme parks, international schools and golf clubs at affordable prices, these developments are far and few between. Most affordable homes usually come with only the basic facilities, and they are not usually located in a prime area.
Priorities
A big part of why millennials are unable to afford a home home could also be something to do with their priorities. Many graduates now look at enjoying life before starting to work, which means that many of them spend more money their lifestyle rather than on buying a property.
So if you are millennial, and are looking for a home or property for investment that you can truly afford, check out A Tower @ Austin Regency.
