Can Millenials and Gen Z Own a House?

The Millenials and Gen Z of Malaysia struggle with housing affordability and find themselves at a turning point with a question hanging above their heads: can they afford to have their own home?

For younger generations, this question is not merely uncertain but deeply essential as they navigate a landscape where dreams of homeownership seem increasingly out of reach.

Millennials and Gen Z have been facing challenges with housing affordability especially in major cities in developing countries. They are struggling with the rise of housing costs, therefore minimizing their options for affordable rental options. 

Current State of Housing Affordability in Malaysia

Data from Malaysia’s Ministry of Finance shows that from 1981 to 2019, Malaysian house prices rose with incomes. On the other had, income growth fell behind due to inflation (Thaker, n.d.).

According to survey findings, Malaysian property prices increased by 3.2 percent in 2016. Whereas wage levels saw a rise of just 3.9 percent in 2017 (“Millennials and Home Ownership,” 2017).

This shows that as incomes increase, so do property prices. This highlights the challenge of buying homes when wage growth closely matches rising property costs.

Millennials and Gen Z struggle to get bank loans due to strict requirements and high down payments, hindering those with limited savings or irregular income.

Also, those unable to buy homes face high rent, reducing disposable income and worsening financial instability.

Wage gap between financial groups

Harun (2023) reports that Malaysian household income distribution shows 3.16 million households in the bottom 40 (B40) category earning up to RM5,249, while the middle 40 (M40) group earns between RM5,250 and RM11,819 on average.

A total of 1.58 million households fall into the top 20 (T20) category, earning more than RM11,820.

In comparison, the T20 group form 46.3% of the total household income distribution, slightly down from 46.8% in 2019. The M40 group consist of 37.6%, while the B40 group represents just 16.1% of the overall income distribution.

Many Gen Z and Millennials struggle to afford housing, especially those in the lower-income B40 category.

Alternative Housing Solutions

Rent Control and Security: Improve rental regulations to stabilize prices and ensure secure leases, easing the strain on those unable to buy homes.

Financial Support Initiatives: Make it easier to own homes with shared equity schemes or rent-to-own programs, cutting initial costs and aiding property ownership.

Facilitating Affordable Rental Options: SPEEDHOME lists a variety of rental properties at different prices, providing affordable options for young renters. The platform ensures clear pricing and connects tenants directly with landlords to find housing that fits their budget.

Streamlining Rental Processes: Features such as online rental agreements, digital payments, and easier landlord-tenant communication reduce barriers for young renters.

Conclusion

In a nutshell, Millenials and Gen Z struggle with housing affordability especially today. This may be due to: stagnant wages, high property prices, tough loan rules, and income gaps. This pushes them towards increasingly expensive rentals, causing financial instability.

By empowering younger generations with affordable housing solutions, Malaysia can foster economic stability, social equity, and inclusive growth.

Collaboration between government, private sector stakeholders, and communities is important in implementing these solutions successfully.

Explore Rental Options: Visit SPEEDHOME to explore a wide range of rental properties, including affordable options that suit your budget.