Dear YAB Prime Minister, house prices are spiraling, please do something for the 'Homeless Generation' Sir.

No matter how you spin it the truth remains that the situation for the Homeless Generation of becoming first-time home buyers by age 35 is still looking dire.

Brendon Lee, RinggitPlus

Dear YAB Prime Minister, away from the PR1MA, BR1M, the KR1M and many other great 1Malaysia initiatives of yours, which unfortunately will never cover the problem of spiraling price of houses especially in the urban areas of Klang Valley, Johor Bahru and Pulau Pinang etc. The 'homeless generation' are young mostly below 30 and they will get older, the spiraling cost of houses will make life very difficult for many Malaysians and will cause a great many social problems. 

This issue of great National Importance should be debated in Parlimen by both the BN and PR, how to control land and house prices, how to put more regulatory control on the mafia developers who seems to get their way all the time, stop saying the market should determine prices if you allow foreigners to buy homes here in Malaysia. 

The spiraling house price is a cause of great concern of the parents as well, they have to fork out their life saving for their retirement to help their children buy houses now!

Please do something for the 'Homeless Generation' kind sir: 

The Homeless Generation - Can you afford your first house?

malaysiandigest.com By BRENDON LEE Wednesday, 03 July 2013 12:34 SAM is a single, 28 year-old working in an executive position. His take home salary is RM2700 and he is currently staying with his parents in Damansara Jaya.  Despite having a healthy social life, Sam manages to live a life relatively free from debt aside from his RM580 a month car loan. After factoring in his expenses on food, transportation, entertainment and hand phone bills he is able to set aside RM500 as savings. Sam leads a fairly comfortable life but he also realises that he cannot stay with his parents forever. However, given the rising cost of property in urban Malaysia owning a house seems more like an impossible dream unless Sam wins the lotto tomorrow. If you are a young, working professional under the age of 30 you will be able to relate to Sam’s story. More and more young adults in Malaysia are joining the ranks of the ‘Homeless Generation’, professionals who have been in the workforce for years but still cannot afford to move out of their parents’ home due to stagnating salaries and an increasingly competitive property market. Going by current market prices and bank rates, a person who earns RM3000 a month will struggle to pay off an RM250k home loan. Here’s a breakdown on what it would cost to finance an RM250k, 3 bedroom, 2 bathroom, 774 squarefoot apartment in Puchong today on a RM3000 salary:

Banks generally would not approve a loan if the monthly instalment exceeds 60% of the borrowers monthly income and this is assuming the best case scenario where the individual is able to fork out RM25,000 up front and possesses a good credit history. How many 20-somethings do you know would fit these criterionswithout receiving financial aid from their families? Amin managed to do it. He bought an RM400,000 house with an RM3000+ salary but ended up in a hock very quickly: “I managed to buy an RM400k house a few years back. I was earning RM3150 a month and my monthly instalments were RM1900. I was also struggling to pay off my car loan which cost me RM480 every month plus another RM400 for maintenance. My handphone bills were around RM100, thank goodness my neighbour was kind enough to share his wi-fi for free. My credit card was always maxed out and the lowest point was when I couldn’t even afford a trip on the LRT. This went on for a year and finally I had to resort to a personal loan and my EPF Account 2 to keep afloat. Fortunately, the property appreciated twice the amount I paid and I was able to refinance it and reinvest in other properties. Even though it’s possible; I wouldn’t wish such a predicament on anyone unless they’re ready to face some really challenging times.” Amin got lucky towards the end of his plight and plucky financial management allowed him to stay afloat but the situation is risky. To help counter this problem, the government introduced the Malaysia My First Home Scheme; allowing first-time home buyers who earn less than RM5000 a month to finance a house that cost up to RM400,000. The scheme removes the need for a down payment but the result of which is simply a large loan amount with a hefty monthly repayment. Considering that most properties within that price range are situated in suburban areas outside of economic hot zones like Petaling Jaya and Kuala Lumpur, you’d still have to factor in the increase of transportation costs to an already breaking budget. No matter how you spin it the truth remains that the situation for the Homeless Generation of becoming first-time home buyers by age 35 is still looking dire. *This article was brought to you by RinggitPlus writer Brendon Lee who despite all odds refuses to join the ranks of the Homeless Generation before him. RinggitPlus.comcompares credit cards, debit cards, balance transfers and personal loansto help Malaysians get more for their money.