House Imposible!

The phone’s alarm buzzed noting you of the 2 more months you have left until you hit the 3 series age. You started to reflect on your life and all that you have achieved so far… academically? spectacular! financially? hmm… lets just say if your tires blew up this month, you will die of hunger.

You realised you still stuck in that 9 to 5 job that you hate and to top it all… the debt from that spectacular academic you ‘achieved’ from before. How about life goals? Financial freedom? Open your own soup kitchen and giving back to the community? Wow slow down, that’s too BIG of a dream..

OK brain, lets start small.. how about owning your.very.first.house? Ok that’s it..

Thats sound easy right? Well, keep on dreaming. Want to know why?

Because after more than 3 months of having these above conversation with myself, countless of back and forth inquiries with prospective property agent, many weeks of site visits and showrooms, signing agreements to put on a lofty sums of deposit and many many OEM company labelled mineral water later, you get a called from your bank practically saying and I quote “We are sorry you work too hard and still be broke, but you definitely cannot own the ‘cheapest studio in town’ because well, it is just impossible. Maybe you can go for the zero interest cemetery plot offer we are having right now?”

NO freaking THANKS. I know if I asked how much, it would have been way too much from what I can afford anyway.

So why? Why is the housing price in this country skyrocketed? What makes buying a property let alone dreaming of doing investment with it is almost too scary .. too dreamy.. too two kidney and a gallbladder away?

Based on the data and statistics by NAPIC, index price for housing in cities across Malaysia plummeted to -o.6% in 2018. Hey, that should have drove the price lower right?

well, big fat WRONG!

The obvious reason the housing price is high and unaffordable is because of the surplus of luxury residential projects by renowned (monopolised) developers that were simply unparalleled to the average wages of common Joes and Janes in Malaysia. To put it simply,This ridiculous surplus vs demand is droving younger generations especially B40 into more and more demand for cheaper housing with less and less supply that cater to the ‘affordable’ side thus making the overall housing price to rise.

Not to mention the cost vs Inflation factor. Unfortunately, the median percentage of real estate inflation in Malaysia is very different from year to year. The Malaysian wage gap has remained the same for a long time, causing the purchasing power of Malaysians to not be in line with inflation. And how about the fact that basic cost of buying a home like stamp duty is one of the sources of income for the country? the tax collection by the Inland Revenue Board (IRB) itself recorded a total of RM137.035 billion in 2018. The result? house prices like it or not are linked to national tax policies and they are fully regulated by the government. There are many examples that can be found in Canadian and New Zealand government in terms of public housing.

Lastly, the problem with what i would like to call, 'property speculation' and plays a huge role in the market price. When real estate experts (read; so called Instafamous real estate mogul who charged thousands for one property enriching class) speculate that a property or area is going down or up, potential property buyers will certainly take that into consideration and make it a cause for buying real estate. Real estate speculation is primarily driven by elements such as the property booster, the ability for long-term investment and rental rates for tenants in the area. As a result, house prices in the area will increase due to rising demand or vice versa.

Here is an interesting video that prompt my entry to this week's Blog. Check it below;