Understanding Generation Y

When it comes to Generation Y (Gen-Y) seeking to buy their first property, there appears to be a huge expectation gap. Apparently, Gen-Yers won’t buy into low-cost and medium-cost apartments and houses because they aim too high, desiring the high-end living that their salaries are unable to support, according to several property experts.

The crux of the matter is the lack of a trade-up mentality among younger house buyers, particularly among Gen Yers, who are eyeing what they want and not what they can afford. These are the 20- to 30-year-olds who are starting out, some of whom are just starting to earn their first salaries of around RM3,000 a month, says Malaysian Institute of Estate Agents (MIEA) president Siva Shanker. “They want something that they cannot afford now. So what do they do? They save up. However, the house prices move up faster than they can save. But if they practise trade-up, affordability will not be an issue,” he says.

Gen-Yers, also known as the Millennials, were born during the 1980s and early 1990s, and are often referred to as “echo boomers” because they are the children of parents born during the baby boom. Because the generation that is born during this time period have had constant access to technology in their youth, their perception is different to their predecessors, the Generation X (Gen-X).

For example, the Gen-Yers are not afraid of quitting their jobs without a back-up plan, says Shanker during a forum held at the Property Investment Convention 2014 organised by the Wealth Mastery Academy on July 12 and 13. “And they [Gen-Yers] are not worried that they will have no income.

For the Gen-Xers, they will have another job waiting before they resign,” he says, explaining that the resignation is merely a matter of transitioning from one employer to the next. “The Gen-Yers are different and it is because they are brought up differently. In my time, if I lose my job, I would have been whacked across the room,” he says.

“Now, when the Gen-Yer quits, their parents are sympathetic to them.” Shanker suggests that instead of having to deal with saving up for that condominium “that’s out of reach”, younger buyers should consider the trade-up method as an investment route to securing the home they desire. The problem for most young buyers is that they are looking at the primary market in hot spots and the property prices in those areas are most certainly beyond what they can afford. “Don’t look for a hot spot. Look for a spot that’s hot for you and make it work for you,” he tells FocusM.

Property entrepreneur Prudence Wong shares her experience of trade-up, coming from a family that was not well off. Her trade-ups obviously worked for her. Her first investment – an apartment – had offered good rental cash flow and when the time came for her to dispose of it, she enjoyed a substantial capital appreciation. “I started small. I moved from a small apartment to condominium units, to shoplots, factories, and bungalows and now to land,” she says. “It’s not what you invest in but how you invest.

I had basically two strategies. The strategies are maximising the rental cash flows and multiplying the profits. How do I do that? I add value to the properties I invest in.”