By Willy Wilson | Aug 28, 2009 | Star Property
Has the global financial crisis served as a forceful drive for young Malaysian professionals? It could very well have been.
Despite the global recession that has hit the property industry in many countries, the property market in Malaysia still remains a favourite investment option. Prices for most of the residential properties have held out quite well throughout the crisis period, as proven by the strong sales registered by developers in 2009.
Yes, there is a significant price drop in the premium condominium market. But if developers were to target the country’s younger population between 25 and 44 years old, which makes up to a third of Malaysia’s population of 26 million, then they are making the right move. Combined with the prevailing low interest rates and slew incentives offered by developers, this year seems to be the year for young professionals to own properties.
StarProperty chats with three young professionals who have managed to buy apartments for themselves and finds out why you, too, can afford to own property.
Lavinne Yap, 30, Brand Manager
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What got you into property investment?
It started four years ago when my cousin and I were looking around for a place to rent. After visiting a few places, it occurred to us that the rent in KL costs just as much as buying. Consider this: a studio in Bangsar, Mont’ Kiara and Hartamas costs at least RM1,200. At the end of the day, the place is still not yours.
When did you buy your first property?
Three years ago. I decided to buy a 1,190 sq ft, two-bedroom apartment in Wangsa Maju for RM273,700. It was an ongoing project that would take three years to complete. This October, I will have the key to move in, which also means I have to start paying a monthly installment of RM1,400 per month.
So far, how many properties do you own now?
I own two properties. I bought my first condominium unit in Riana Green East (Wangsa Maju) three years ago, and have recently purchased another unit in Regalia Service Apartment (Jalan Sultan Ismail).
Any reason why you decided to invest in a newly developed condominium?
Nestled between Ampang and Duke Highway, I foresee this area will be fairly busy within the next couple of years. With big names like Cold Storage, Carrefour and KFC operating their business nearby, I am even more confident that this area has a lot of potential. As for my second purchase, I guess prime location says it all.
Any tips on where to invest for young professionals out there?
Forget about buying properties that are far from the city. The properties worth purchasing are those that are located within 15 driving minutes from the city centre. The reason is because the city will always be expanding, and when that happens, chances are the value of your property will go up.
Have you always been good with your finances?
Not really [laughs]. I shop a lot; handbags and shoes are my worst addiction. I honestly am not good when it comes to saving. But thanks to the recession, nowadays I am forced to shop in my own closet.
Then how did you afford two condominium units at the age of 30?
I cut down on shopping [laughs]! See, if you’re earning RM8,000 per month and you think a wallet that costs RM1,500 ‘is normal’, then think again. Chances are you don’t really need that and just so you know, RM1,500 can pay your loan interest for the first year should you decide to buy property.
Jade Yong, 28, Project Manager
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When did you buy your first property?
I bought my first property early this year when the price of the property market went down. It is a 3-bedroom condominium, located in Segambut.
How big is the unit and how much did you buy it for?
The unit is 1,447 sq ft and I paid RM270,000.
Share with us how you afforded the property at a relatively young age.
Well I’m not that young [laughs]. But get this; it doesn’t really take much to buy a property. Yes, it may sound like a lot when you look at the total amount.
I claimed my EPF account and my personal savings to settle the down payment (which normally is 10 per cent of the total price), and took a 25-year loan from the bank to pay the rest. This scheme leaves me with an obligation to pay the bank RM1,170 per month.
Bear in mind that you need to pay for the lawyer’s fee and some other administrative works, as well. Put aside about 40% of your total down-payment for this.
Do you rent the rest of the rooms out to people?
Yes I do. Renting two rooms out helped to reduce my financial burden. In fact, it gives me extra income. I also get to choose the people whom I would want to live with – a privilege I did not have when I was renting.
At what age do you reckon people should start thinking of owning a property?
After four years of working, I think one should really be looking into owning a property. Even with a RM3,000 monthly income, one should still be able to afford a decent apartment unit.
Has owning a property changed the way you manage your finances?
Definitely! Prior to owning a property, I spent so much on shoes. But now, I have to choose between shoes and art pieces [laugh].
What are the main considerations one should look into when buying a property?
Besides the basic requirements of a good location, quality standards and developer’s reputation, one should also consider facilities, infrastructure and accessibility – these are the factors that will keep the value of a property increasing.
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Pietro Felix, 32, Radio Host & Deejay
When did you decide to buy a property?
I have been thinking about buying a property for a couple of years, but it wasn’t until late last year that I got my first condominium unit in Menara Duta, Segambut.
What was your biggest misconception about buying properties?
I used to think that buying a property is too far-fetched and complicated. But the truth is, it is affordable and simple.
Yes, the legal process and paperwork may take time; 3 months in my case but all you need is a reliable lawyer. An EPF claim usually takes about 30 days.
Any particular reason why you chose to buy a property in the Segambut area?
Firstly, I like Mont’ Kiara but I can’t afford it. Being near to Mont’ Kiara is good enough for me at the moment. It certainly pays to know the potential value of your neighbourhood. Young professionals who are looking to buying their first property should take note of this. As the adage goes, do not buy the house but buy the neighbourhood.
Secondly, the strategic location of Segambut that links Mont’ Kiara to Jalan Kuching (KL) and NKVE Highway.
Would you sell your condominium if there is a good demand price in the market?
Not if the demand price is less than 40 per cent of what I had paid. I got this condominium for RM260,000. With the 30-year bank loan that I took, I pay around RM1,070 per month.
Do you rent out the vacant rooms?
No I don’t. I like my own space.
When do you think is the right age to buy a property?
I am not sure in terms of age. Perhaps it is best to buy when you know you have settled a path in one city and know that you’re not moving to other cities for a while.
Has there been any change in a way you manage your finances after owning a property?
Oh yes. When I am out shopping, my eyes would automatically be set on home-related products like a shoe-rack, cupboard and furniture.
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