PETALING JAYA – Rising property prices in city areas coupled with their low salaries have made owning a home in their preferred locations an unattainable dream for young Malaysians, which is why many continue to rent.

According to the National Property Information Centre, the average price of a condominium or apartment in Kuala Lumpur’s Batu district is RM735,000 ($222,316), while a similar property in Setapak district, also in Kuala Lumpur, costs RM430,000. .

In Selangor, a terraced house in the Petaling district costs RM750,000, while the same type of property in Sabak Bernam, which is on the outskirts, is priced at RM330,000.

A bank manager who requested anonymity said workers aged between 24 and 30 typically have lower incomes and cannot afford to buy property in central areas.

“If you work in Kuala Lumpur and are looking to buy a property nearby but you earn, say RM2,400 to RM4,000 (monthly), you cannot afford any property there,” he said.

“If the price of the house is around 500,000 lei, you need to earn at least 4,600 lei to own it.”

He said banks would usually ask to apply for a joint loan with their partner or parents.

He said banks also look at the debts people have, while the maximum loan eligibility is up to 70% of their monthly income.

“Some may have a car loan, a student loan and credit card (debt). So what is left of their income for loan eligibility is not much to afford a house priced between RM350,000 and RM400,000.

“That’s why most prefer to rent instead of buying a property,” he said.

The banker said the cheaper homes were located further from the city center but would cost more to travel to work.

He proposed that the government come up with rent-to-own schemes so that young people can afford to buy property closer to their workplace.

When determining eligibility for a loan, he said banks will also consider a person’s length of service, which must be at least two years, the type of company and the industry they work in.

“Those who work as workers or on a contract basis are not so favored by banks because these jobs are less stable, especially if they are affected by the pandemic or financial crashes,” he said.

He added that banks also look at a person’s credit score, such as CTOS.

“If your record shows you’re always looking for credit facilities, it means you’re not financially secure,” he said.

To earn extra income and be more eligible for a loan, he advised young people to apply for an ASB loan as soon as they enter the workforce.

“Your ASB dividends can also be a source of income,” he added. STAR/ASIA NEWS NETWORK