Buying your first home

By Jude Toyat
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Everyone dreams of owning their own home, but only few get to realise their dream.

Buying a home is a daunting task for many as it is the biggest financial commitment that one have to face throughout their entire life, but with a proper budget plan, it can become an exciting experience of a lifetime.

Recently, The Borneo Post SEEDS had a chance to sit down with several home developers to talk about the housing market and get tips on how to make the dreams of many, especially those in their 20s who have graduated and found jobs, of owning a house come true.

Get into the habit of saving

Pic 1

John Kasoon Sia (second left) with other Jak Kwang Builders & Development Sdn Bhd sales and marketing team members.

“The determining factor for one to eventually be able to purchase a house is to be more financially disciplined,” said Jak Kwang Builders & Development Sdn Bhd sales and marketing manager John Kasoon Sia.

“It is important for them – especially the younger generation – to learn to set aside part of their salary and discipline themselves to do monthly savings which gradually becomes a habit.”

A good savings habit leads to having enough money for life investments.

“The amount of saving depends on each individual. Those with higher salary can invest more for a better future,” he added.

He advised to set aside 10 per cent of your monthly salary every month.

“By end of the year, he or she will be surprised on how much money they have saved. After several years, they will have enough to provide them a better chance for investment,” he added.

For Kuwait Finance House (Malaysia) Berhad account relationship manager Kim Ho Boon Ni, the younger generation must start saving the moment they start work.

“The moment they receive their confirmation letter on their employment, they should start thinking about purchasing their first house,” she said.

On matters of loans, she pointed out that the minimum requirement for an individual to obtain a housing loan is to have a minimum gross income of RM3,000 a month.

“Financial institutions will also look at the Nett Disposable Income (NDI) and total commitment of the potential home buyer, and if necessary, they will require buyers to form a joint loan,” she added.

Today, most fresh graduates earn an income of not more than RM2,500 to RM3,000.

“After two years of working, one might feel the urge to buy a house which today costs upwards of RM300,000.

“Most bank loans today will cover 90 per cent of the house price and another 10 per cent should be from the potential buyer’s own saving for the down payment. Thus, it is important for them to start saving early,” she added.

CMS Property Development Sdn Bhd (CMS Property Development) sales and marketing manager Ashley Ang said that it was not easy for one to purchase a house if their monthly salary was only about RM2,500.

“It would be really difficult for those who earn less than RM3,000 because you need to also pay for other things such as your car loan every month. One must at least have a RM3,500 in total of their monthly income to comfortably own a house,” she said.

Apart from doing part-time jobs, Ang advised new home buyers to make room for rent and keep some for themselves to lighten the burden of paying back the loan.

“The reality is today you cannot own a house if your salary is less than RM3,000 unless you are trying to get your house through public-private-partnership projects such as the 1 Malaysia Housing Project (PR1MA) and the Private Affordable Ownership Housing Scheme (MyHOME) programme that offers houses located pretty far from the city at much cheaper prices,” she said.

She said that home developers have also been trying to help the younger generation looking to buy their first home by offering them rebates.

“From the 10 per cent that they need to come up with the down-payment, for example, they will probably just need to pay 5 per cent of it and another 5 per cent comes as rebate, so instead of paying RM30,000 – 10 per cent of RM300,000 being the cheapest price of house today – they only need to pay RM16,000,” she added.

Types of houses suitable for buyers in their 20s

According to Sia, most of the younger generation today can’t afford to buy or live in houses located in the city because the houses are getting more expensive.

“The houses, especially those located in prime locations in the city, are getting out of their reach every year.

“Therefore, more of the younger generation today will have to live further away from the city and their workplace,” said Sia, adding that in Sarawak, it is still good to stay out of the city as,  unlike Peninsular Malaysia, there are less traffic jams especially during peak hours.

Such locations within Kuching’s vicinity that Sia considers still suitable for the younger generation today include Kota Samarahan, Matang, Batu Kawa, Serian, and houses along the Kuching-Serian road.

He regards Muara Tuang as a prime location – fast booming with various business and commercial centres as well as a catchment for residential projects.

Pic 2

Kuwait Finance House (Malaysia) Berhad account relationship manager Kim Ho Boon Ni.

Meanwhile, for Kim, single storey terrace housing is the best choice for people in their twenties as some projects may offer them at the more affordable price of RM250,000.

“Such houses are available in Kota Samarahan or areas near Bau,” she said.

Despite the poor economy, Kim said home buyers will never get a house at a discounted price due to the price of materials which keep on increasing and developers who need to maintain the last purchase price.

“Property value will not be reduced, it would never happen.”

She also said that most young adults here will definitely receive support from their families on home purchasing especially on the down payment because “Sarawakians are very conservative.”

As for Ang, the kind of houses which are suitable for young adults today depend heavily on the affordability.

“If you can afford it, it should be suitable for you and your earnings.

“In my opinion, two bedroom apartments which may cost around RM300,000 will be most suitable for them. Don’t burden yourself with houses more expensive than that. You must enjoy a nice home, and enjoy your life as well as there is a need to balance everything together.”

She also encourages young adults to try to get houses from programmes and schemes introduced by the  government including MyHome 1, MyHome 2, PR1MA, Skim Rumah Pertamaku.

“The government usually gives out subsidies, for example the MyHome schemes where they are giving out incentives up to RM30,000 per home unit,” she added.

Turning properties into investments

To turn a house into investment property, Sia said the first thing a potential home buyer needs to do is look at whether the area will be booming in the near future.

“Drive around the city and in the outskirts and take a look at its surrounding areas. Observe the area and start noticing whether the area has a development there or not. It can easily be indicated by the billboards coming up with future developments.

“Take note of the signs because that is where you should probably be buying your house, regardless of whether it has been completed or not because by the time you have already confirmed the purchase, when the development starts to kick in the house values will immediately appreciate,” he added.

Meanwhile, for Kim, most first time home buyers will only start to think of making property into an investment starting from their second purchase.

“Most will invest in non-landed property such as an apartment or a condo and will purchase small size like RM200,000 or RM100,000 for investment.

On the housing development scene, Kim said that the demand for landed property remains strong.

“The market is a bit slow but we cannot deny that there will still be people who want to buy a house, especially landed properties.

“I can say there are still lots of people looking for houses even though the market is bad. I believe by 2017 the economic trend or strength will slowly pick up,” she added.

Pic 3

CMS Property Development Sdn Bhd sales and marketing manager Ashley Ang (left).

In Kuching, Ang said that the best property investments are still landed properties.

“Apartments cannot appreciate that much anymore, and landed property will appreciate more.

“Nowadays, lots of people are turning their property into homestays instead of renting them out. At RM1,500 per month one can rent the room by day or by week – that is the way to invest now,” she added.

They were met during the Sarawak Housing and Real Developers Association (Sheda) Property Expo 2016 last September at the Borneo Convention Centre Kuching (BCCK).

The annual Sheda Property Expo is held to attract home buyers, investors and more to visit, survey and book their dream properties.

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