Trend of young people buying auction houses increasing

SHAH ALAM - The trend of young people looking for auction houses in this country has almost doubled since the beginning of this year after the government allowed the withdrawal of the Employees’ Provident Fund (EPF) funds.

Auction real estate consultant Sharifah Sallina Syed Hashim Al-Djufry said on average since last January, more than 25 young people contacted her to find houses and auction land within a month compared to only about 10 people who did so before that.

“The increase is noticeable, showing awareness among young people who are already working to find a house as their first asset compared to a car.

“They are also eager to buy auction houses because they have money in hand since the government previously allowed the withdrawal of EPF money,” she told Sinar Ahad.

Sharifah Sallina said the EPF money was used to pay the 10 per cent deposit.

Another real estate auction consultant Mohd Haris Sulaiman said that the increase in demand for auction houses and land began five years ago.

He said it then surged at the beginning of this year which involved young buyers in their 20s to 40s.

Haris said the situation was different from before when most buyers were 45 years old and above.

“This shows that young people are becoming more literate and know the value of houses and auction land as a first home or investment asset.

“People used to think that buying an auction house was risky. Now they understand more and most of those who come to study this knowledge are young people,” he said.

Haris, who had been active in the auction real estate industry since 2009 said that usually buyers would choose a house or land in a residential area that was strategic, mature and provided many job opportunities.

“New area openings take a long time to develop, which is why some people like mature or semi-mature areas.

“For example, 10 years ago, if there was a house in Rawang or Bukit Beruntung, people might have been wary of buying it, but now there is a lot of demand,” he explained.

Meanwhile, licensed auctioneer Ishak Hat said the increasing trend sometimes causes demand to exceed existing land and houses.

He said the list of available properties was increasing in demand when banks started to reopen the auction process little by little after the Movement Control Order (MCO).

“In the past, banks did not auction due to the MCO, so there was no such process. When banks reopened, auctions were held in small increments.

“So, the list of available properties is increasing in demand,” he said.

Ishak added usually the auctioneer would place a bid budget of RM500,000 or less for a house with land, depending on the area.

“The price is usually for houses with land in suburban areas such as the Klang Valley, Rawang, Bangi and Nilai,” he explained.

In the meantime, real estate consultant Mohamad Yusuff Mohd Azlan said auction assets offer around 20 to 30 per cent cheaper than the current market.

He said the experience of people successfully buying a house and auctioning land shared on social media also gave the confidence to young people to bid.

“In addition, there are also many real estate agents, including some who have written books about auction properties.

“In the past, young people only knew about the existence of houses but did not dare to enter the public auction. Now that they have the knowledge, they dare to bid,” he said.

The young people, of course, had their own views on whether to buy an auction or new property as a first asset and a long-term investment.

Taha Rusydi Mohd Nazri, 33, said that the price of the offered auction house was lower than the market, which was the main factor that attracted him to buy the property.

The bank assistant manager in Kuala Lumpur said that houses in strategic areas and with access to other facilities such as public transport, shop buildings and supermarkets were the choice of many.

“We know that auction houses do not only involve old houses because there are also houses that have just been completed but had to be auctioned because the owners were unable to pay the bank loan,” he told Sinar Ahad.

Harisa Ameera, 27, who is an advertising writer from Bukit Jalil, Kuala Lumpur said she was interested in buying an auction house, but it would depend on the condition and location of the house.

“Because if we get an auction house that is in good condition and the price is cheaper than the market, we don’t need to spend more money to renovate the house. That is already a saving,” she said.

A sales assistant from Kuala Lumpur Muhammad Najmi Nadzrul Rizal, 25, was of a different view as he chose to buy a new house as his first residence because of the financial constraints required if he wanted to bid on an auction house.