The Eternal Gripe: House Prices, or "Get over it!"

Latest op-eds like "60% of Penangites cannot afford to buy houses" and the perennial favourite "Graduates cannot afford properties" really get my goat.

Seriously.

Am so fed up with all the whining the newspapers do about this issue.

Fed. Up.

Frankly, why we are even using a fresh graduate salary as a benchmark for purchasing property? They shouldn't be buying one fresh out of university anyway.

If you just started work - this is what you should be doing:


  1. Rent a room, not an apartment - A ROOM. Save money.
  2. Build up your savings.
  3. Build some more savings.
  4. Depending on your job location, you may need to buy your own transport - either a bike or a small car. Keep it cheap first, OR get a second hand car (make sure you ask around for a reliable mechanic!)
  5. Buy an apartment or a flat first. Don't buy a new property, buy one that suits your needs and your budget and is in a high demand location for rental - this usually means high density but with conveniences like shops and public transport. Be prepared for it not to be in a posh area. Stick it out for a few years.
  6. Save some more money, earn some more money through promotions or change your job if you need to (that's a whole other topic vis-a-vis career planning).
  7. Get enough equity and savings before you upgrade.


To put it simply, start small, buy your first property after a few years of working because you need to save up and build your credit record too - this being Malaysia, you can't get away from having your own transport unless you're lucky enough to be living AND working along the train lines, so unfortunately, that has to be a priority.

How much money do you need to have saved up? You should budget to have:


  1. 10% for the down payment
  2. 3% for legal fees and others
  3. 15% for furniture and renovations
All in about 28%. Ok, for the furniture and stuff - you may have to put on credit, not an ideal situation BUT as these are essentials and so long as you don't go overboard and stick within your budget, it's all right to do so for a short period of time (but you must be disciplined to pay it back as fast as possible).

So going back to the 13%, part of it can be funded through your EPF's Account 2 but you have apply for it - so you'd still need to have about 13% cash in hand to pay for the earnest deposit of 3%, then the remaining 7% before you can sign off the Sales & Purchase Agreement to get your loan (then 3% legal fees), only then can you get your EPF money which can come in handy to bring back your savings or use for furnishing your house.

For a decent-ish mid-range apartment nowadays in KL, you're looking at about RM300 to 350K, so 13% of that is going to be RM40,000 in cash.

Not easy to accumulate, true.. I must admit, I myself got a lucky break from a windfall gain which I put into buying an apartment which has increased in value substantially.

So work hard, save up and good luck, maybe you can get lucky too with some unexpected help like a bonus or a gift :)





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