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Millennials Can’t Afford to Buy Houses

In Malaysia, only 35 percent of millennials were able to buy their own residential property. Of this, 29 percent were assisted by their parents, according to a survey by HSBC entitled “Beyond the Bricks”.

On the other hand, most can’t afford to purchase one. While 94 percent of millennials without any homes have plans to acquire one over the next five years, 77 percent revealed that they have not yet saved enough for a deposit. 71 percent also said that they need to have higher salary before they can climb on the property ladder, while 23 percent moved back home with their parents to save for a down payment.

The study pointed out that rising property prices and slow salary growth remain an obstacle for Malaysian millennials from purchasing their own house. It estimated that residential prices climbed by 3.2 percent last year, whereas wages are only forecasted to rise by 3.9 percent in 2017.

According to Lim Eng Seong, Head of retail banking and wealth management at HSBC Malaysia, home prices here have sharply increased in the past ten years, but the price growth slowed last year.

“[mid-tier] houses, ranging below RM500,000, are in high demand among millennials seeking to purchase their first home,” he noted.

In addition, HSBC identified four practical steps to help people achieve their home ownership dream, namely plan early and do not underestimate the deposit, budget beyond the purchase price, consider what sacrifices to make, and get a full view of your finances.

“Such examples include saving for the deposit early, budgeting extra items that make your house a home and seeking professional financial advice to help make the right choices,” Lim added.

Conducted in October and November 2016, the study covered 9,009 respondents age 18 and above from across nine counties, namely Malaysia, China, Mexico, France, United States, Canada, the UK, Australia and United Arab Emirates.

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