‘Lifetime rental’ or owning a house?
SHAH ALAM - Recently, Sinar Harian's front-page report titled 'Lifetime rental’ stirred discussions on social media as it reflected a growing trend among individuals in the country who prefer renting over owning a home through financial institutions loans.
These individuals were usually those with incomes of RM3,000 to RM4,000 and below.
Economist Dr Nungsari Ahmad Radhi said three key factors that encouraged young people to embrace the 'lifetime rental’ concept instead of owning their own home.
Firstly, the youth prioritised generating excess cash flow over asset ownership, followed by the inclination to incur early debt through personal loans, credit cards, mortgages and monthly installments plays a role. Lastly, developers setting unreasonable prices also influence this preference.
Meanwhile, Future Labour Market Research Centre (EU-ERA) economist Muhamad Zharif Luqman Hashim estimated that the rough monthly household income needed to buy an apartment in the city with an average price of RM380,000 is at least RM6,287.
Find out the views of the youth in this country on whether to stick with renting or take the initiative to commit to buying a house at a young age.
POSITIVE
'Important to own a home for family sustainability'
"Personally, I agree with buying a house because it is an important asset for the family and children. If one continues to rent for life, where will the heirs reside?
Owning a house also enables raising a family and children in a stable environment, including schools, reducing the risk of constant relocation.
Usually, with rented homes, there is a risk of eviction if the owner wants to reclaim the property. However, such issues do not arise when you own your own home.
The question of salary and subjective home value is crucial. Considering current government initiatives, affordable and conducive homes are within reach.
I believe that someone earning around RM4,000 a month is capable of buying a house if they manage their finances well and have minimal responsibilities.
However, house prices should be proportional to income, with monthly payments accounting for only 20% of the salary, leaving room for other expenses.
Furthermore, many social media shares recount personal experiences of completing monthly mortgage payments but still having to settle fees such as interest.
In my opinion, such views are unfounded as many Islamic financial services are offering interest-free home financing.
Thus, when payments are completed as scheduled, ownership is transferred and the relationship with the bank ends, with other usual costs like utilities, maintenance and property tax," - Student, Muhammad Aqmal Najmi Mohd Aziz Harjit, 22
"For me, buying a house is a better option than renting because we are bound by a contract between the owner and the tenant.
While it may seem impossible to buy a house in the near future, even within the affordable categories, I hope I can own one between five and ten years from now.
I prefer to survey strategic housing locations with access to public transportation, near restaurants, mosques, and playgrounds, even if offered at a higher price.
This is because I want to stay in one area in the future so that the next generation of my family can live there without moving elsewhere.
Although such commitment is substantial, one job alone is not enough but working part-time as a photographer in the gig industry significantly helps reduce financial burdens.
I believe many are concerned about hidden charges, interest, and usury, especially on Facebook groups.
Honestly, I don't care about their horror stories or bad experiences because it's a common practice for residents to express their dissatisfaction.
Thus, there's nothing to worry about; if you fear such things, avoid taking on any debt," - Private sector employee, Mahendran Selvam, 25
NEGATIVE
'Constraints for those with incomes of RM2,500 and below'
"For me, there are indeed constraints for those with incomes of RM2,500 and below, as the starting salary for the majority of fresh graduates is allocated for liabilities such as cars or motorcycles.
Therefore, the commitment to buy a house is quite significant for young people because the need to commute to work must be prioritised first.
In addition to the commitment to a car that facilitates commuting to work, I also invest in banking platforms such as Amanah Saham Bumiputera (ASB) and Tabung Haji for future use such as buying a house, but not now.
Moreover, current house prices are unreasonable for today's young people, making it difficult for them to buy a house if they don't manage their finances well.
"Comfort is also emphasised, even if it's just renting a small-sized house or room. Being comfortable when returning home after work is crucial for mental and physical health.
Renting a house is the right choice for now, considering I have just entered the workforce, but if there's a better opportunity with a reasonable salary, God willing, I will buy a house," - Banking officer, Nurul Hafawati Azmi, 26
For now, I prefer to rent a house over buying one because it's easier and less complicated.
My rented house is near my workplace, and the commute takes only about 15 minutes so I don't have to travel too far. Not only that, it's also easier for me to move if I get a new job elsewhere.
However, there are also plans to buy a house so that it can help generate income, for example, renting it out while I live elsewhere, but not now.
Some may think that those who rent are not eligible for bank loans, but that's not necessarily true because the choice to buy or rent is in their hands.
Bank loans for housing schemes are eligible for anyone if they manage their finances wisely and spend according to their needs.
However, reasonable attention should also be given to other monthly commitments, such as car, motorcycle, or instalment loans, exceeding or inversely proportionate to our salary management," - Business consultant, Janice Tan Wan Ping, 27
