Skyrocketing Home Prices and Tough Loan Rules, Can Young Malaysians and Gig Workers Still Afford it ?
As property prices continue to rise across Malaysia, the dream of homeownership seems increasingly distant for many young Malaysians, particularly for those in gig or freelance roles. In this blog, we’ll explore the property market and highlight the main challenges that young homebuyers face in their pursuit of owning a home.
Property prices vary significantly depending on the type of home, and Selangor provides a good benchmark for understanding these differences:
Condominiums/Apartments: RM 180,000 - RM 710,000
Flats: RM90,000 - RM227,500
Low-Cost Houses: RM115,000 - RM330,000
Terrace Houses: RM330,000 - RM750,000
From 2010 to 2024, Selangor’s median property prices have steadily climbed, reflecting consistent appreciation. This trend makes the search for affordable housing more challenging, particularly for first-time buyers who lack significant savings.
Since we are discussing housing affordability, it’s essential to define the “young” category. Many of these buyers are First-Time Buyers: Primarily young professionals and newly married couples entering the property market for the first time. Gig Workers and Freelancers: Those working without a traditional salary face unique affordability and financing challenges.
Both of these groups are facing increasing hurdles in their efforts to achieve homeownership, largely due to soaring property prices and their financial circumstances. And 2 main challenges are Upfront Cost & Securing Housing Loans.
One of the most significant barriers to homeownership is the upfront cost. Young buyers often need to save approximately 25% of the property price for expenses that go beyond the down payment. These can include legal fees, renovations, and furnishing costs, which add a considerable financial burden to their journey toward homeownership.
On the upside the recent increase in Malaysia’s minimum wage may provide some relief for young Malaysians, making it a little easier to set aside these essential savings.
For gig workers and freelancers, securing a housing loan is no easy feat. With economic uncertainty and income fluctuations, these individuals often struggle to meet traditional lending requirements. However, with recent budget Malaysia offers several initiatives aimed at assisting first-time buyers, especially in this demographic:
SJKP (Skim Jaminan Kredit Perumahan): Under the Ministry of Housing and Local Government also known as the Housing Credit Guarantee Scheme, this scheme supports first-time homeowners with 100% coverage of purchase price.. Providing a loan guarantee of up to RM500,000 for first-time buyers, including those purchasing sub-sale or auction properties.
These initiatives are designed to make financing more accessible for buyers with less traditional income sources such as the gig workers.
Is Homeownership Still Attainable?
For young Malaysians, especially those without a proper payslip, the dream of owning a home remains challenging. Rising property prices, smaller home sizes, and steep upfront costs are formidable barriers.
While the journey may be more difficult than ever, the support schemes available give hope to young buyers, suggesting that homeownership—though tough—is not entirely out of reach.
