Only one-third of millennials can afford houses 

In a survey covering over 9,000 youths from nine countries including Malaysia, HSBC Malaysia retail banking and wealth management head Lim Eng Seong said many millennials did not have proper financial planning for a home purchase, with only 16 per cent having set a budget.
“About 64 per cent have set an approximate budget, while 20 per cent had no overall budget in mind,” he told reporters on Monday.
The study surveyed participants from Malaysia, Canada, China, Australia, France, UAE, the UK, the US and Mexico.
Lim said overspending is also caused by not budgeting for the additional costs of home ownership beyond the property purchase price.
“The common reasons for overspending are renovation (93 per cent), legal fees (47 per cent) and buying furniture (43 per cent).
“To cope with unexpected costs, 67 per cent of new homebuyers withdrew money from their savings, 56 per cent cut back on their spending, 30 per cent took out a new or larger mortgage, 25 per cent borrowed money from family and 8 per cent borrowed from friends.”
According to the study, Malaysian property prices increased by 3.2 per cent in 2016, while real wages in 2017 are only expected to increase by 3.9 per cent.
Lim said a higher number of millennials would be able to afford homes if developers built more affordable homes.

Huge demand 
“If you have more choices of homes, then the 35 per cent number can go up. The industry needs to support this agenda. There’s still huge demand and a lot of programmes have been rolled out.
“As our infrastructure improves, such as the MRT, so does our accessibility. This should give the opportunity to our developers to build more affordable homes in more locations.”
In view of the lack of cash to afford a home, Lim said many millennials are willing to make quite a number of sacrifices.
He said a total of 62 per cent would consider spending less on leisure and going out; 41 per cent would be prepared to buy a smaller than ideal place; 23 per cent would consider buying with a family member and the same percentage would be prepared to rent out one of their rooms to help with costs.
“Even 14 per cent would would be prepared to delay having children while 10 per cent would move in with a relative to save for a deposit,” said Lim.
He added that financial support from parents can make a difference when saving for a home, with 29 per cent of the respondents stating that they had received funding from their parents.
“Additionally, 23 per cent of millennials moved back with their parents to save for a deposit.”