ALL is not lost. There are many affordable housing schemes that young professionals can look into purchasing if they “buy within their means”, MCA Public Complaints Bureau chief Datuk Seri Michael Chong opines.
He says there are many government and government-linked projects like the Perumahan Rakyat 1Malaysia (PR1MA) affordable urban housing programme that are available.
“Also, look at places like Bangi or Kajang if you cannot afford to live in Kuala Lumpur where the price of houses are double,” he says.
Quoting a Chinese proverb, he advises: “If you don’t have a big head, do not wear a big hat. We should always spend within our means – if your head is small and your hat is too big, you won’t be able to see where you are going.
“People get into trouble when they start buying and living beyond what they can afford. That’s when they turn to Ah Longs and get into even deeper debt. I was supposed to see someone recently but he committed suicide the night before our meeting because he owed Ah Long money – he was only 40,” he sighs.
Fresh graduates who are just starting out can still own a nice home despite the new housing and personal loans caps, he stresses.
Adding that Bank Negara had done indepth research before implementing the caps, he says the new maximum loan repayment periods are fair and reasonable as the purpose is to prevent borrowers from getting into (financial) trouble.
Like Chong, property guru Milan Doshi feels that because changes to the caps are small, property demand and prices are unlikely to be affected.
He says that when buying property, it’s best to stand on your own feet rather than be dependent on the government or your parents unless there’s really no other choice.
“Don’t expect property prices to drop.
“And first timers have to lower their expectations and be realistic. Gone are the days when your first home will be a landed property in a good area near your place of work.
“If you want, you can still afford to buy a landed property for RM500,000 but it will be in a far off location such as Rawang and Kajang.
“However, once the MRT is completed, I don’t think these places will be considered far any more.
“The same thing applies to other cities like Singapore and Hong Kong – your first property will usually be a 700 sq ft condo and later as your income and family expands, you can go for bigger units in better locations,” says the writer of How You Can Get Rich from the Property and Stock Markets: What the Rich Invest In and How You Can Do the Same! and How You Can Become a Multi Millionaire Real Estate Investor.
He adds that young employees don’t necessarily have to live in the property they own.
For the first 10 to 15 years of your married life, it’s advisable to buy a place which makes investment sense but live in a place that’s convenient.
“For example, if you are working and living in Seremban, it doesn’t mean you have to own the place.
“You can always rent a property in Seremban and invest your money in a property in KL which will give you better rental returns and capital appreciation,” he says.
By renting, one will have the flexibility of moving every few years instead of feeling tied down and burdened with inconveniences.
“Career-wise, young people would not have settled yet – they may change companies and as their family size grows, their housing needs will also change.
“For example, I know many people who work in KL but live in Rawang or Klang. They are wasting a lot of their precious time travelling and money on petrol, toll and car repairs,” he observes.
Milan says it’s best to buy in places you know best such as where you live, work or go to frequently instead of trying to seek out new hot areas which you are not familiar with.
What may seem like a hot location today may just as easily turn cold, he warns.
Advising prospective homeowners not to turn to loan sharks or even licensed money lenders if they ever find themselves in the deep end, Chong suggests they approach either Bank Negara or the banking institution concerned for help.
He says there is no shame in doing so.
“If you cannot make your monthly repayments, go and speak to the banks as they will have experts to assist you in managing your debt and finances – approaching an Ah Long would be digging your own grave,” he says.