WHEN a youth is planning for his/her life, housing is one of the key aspects among others (such as transport, home Wi-Fi and phone internet data, health insurance, education or professional certification, starting a new family, retirement).

Purchasing or renting a house is often debated. Both narratives including the monthly commitment should be paid for one’s own house instead of another person’s house, while the opposite will argue that the cost paid to financial institutions in the long run leads us to think about the worthiness of purchasing a house.

However, either purchase or renting a house is also related to the life planning of an individual or a household, which needs to take into account many expenditure matters as well as the income of an individual or a household.

If an individual or a household chooses to purchase a house, there are three possible constraints if the individual or household chooses a house in an affordable price range.

The three possible constraints are either high density (particularly housing projects close to the city centre), distant location or smaller size (particularly service apartments).

Housing demand side assistance needs to be more inclusive. At the same time, supply side policy needs to be supported, such as emphasis on good living conditions, and optimising the cost of supply.

The authorities need to protect the rights of housing tenants and refine the legal framework.

Advocate holistic planning among youth

When youths choose to purchase a house, the decision definitely will influence their peers.

In addition, purchasing a house is often associated with social status, particularly those house prices above the official definition of affordable housing (up to RM300,000).

In the author’s view, purchasing or renting a house is just one aspect among others in life planning.

Some large amounts of key expenditure other than housing need to be considered such as postgraduate or professional courses that are beneficial for career advancement, retirement fund, parent’s retirement condition, a new household-related expenditure (marriage, wife and child health care related fees, child’s education fees).

Even when considering purchasing a house, some large expenses and commitments (either monthly, every six months or annually) need to be considered.

Large expenditure includes furniture, extra parking lot if needed, down payment, legal fees and stamp duty of sale and purchase agreement and loan agreement, memorandum of transfer and related legal fees.

Commitments include mortgage, management fees, water and electricity fees, sewerage charges, fire insurance, local council assessment fees and quit rent/parcel rent.

If an individual or household chooses an affordable housing or housing price slightly above the official definition of affordable housing, they need to be aware of the constraints of the housing to avoid expectation mismatch or to better adjust their life when they move into the new house.

The democratisation of knowledge for online property buyers is crucial to enable potential home buyers to understand the technical concepts (such as freehold vs leasehold, residential vs commercial title), the whole process and the fees involved.

It’s really crucial for potential buyers to learn about the relevant knowledge when it comes to making a decision to purchase a house.

Towards a holistic housing policy

Affordable housing policy and assistance need to be considered from an individual perspective as well as migration between states.

Attitudes and ideas towards marriage among the younger generation are changing, with higher education levels among women and less gender discrimination in full-time employment mean that women can achieve economic stability without marriage.

In addition, a young couple who decides to get married may also be hesitant to take out a joint-mortgage, because of the possibility of divorce, which may be an acceptable option in some circumstances.

On the other hand, there has been inter-state migration (particularly migration to/between Kuala Lumpur, Selangor, Penang, and Johor) due to the search for economic opportunities. Thus, the definitions used to define local residents need to take into account the migration from other states and work in the state.

Last but not least, a more comprehensive legal framework is needed to protect the rights of both homeowners and tenants. – August 19, 2024

* Nick Tan Beng Teong graduated with Bachelor of Economics at University of Malaya. A member of Agora Society, Tan believes in policy reforms in order to build a better nation.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.