FOOD FOR THOUGHT
By DATUK ALAN TONG

A Cantonese phrase commonly heard and used by the community peng, leng, zheng literally means “cheap, beautiful and good” in English.

It is a catchy phrase that truly illustrates a purchaser's wish list when he or she is out shopping. But as most people find out very quickly, it is often unrealistic to expect to get all three in life.

In the context of buying a property, the equivalent mantra would be low price, landed and good location. These criteria are held dearly by young working adults when seeking their first home.

While it is ideal to want to own a home that ticks all the boxes, the execution part is in fact challenging if purchasers confine their selection to this formula.

Meeting one or two of these criteria is less daunting and more achievable. This observation holds water when one seeks to purchase a property in major cities.

Scarcity of land makes it not viable to build landed properties on prime areas and at the same time, market them at low prices.

So, what are the factors to consider when young working adults seek to buy their first home?

To understand the thoughts of a young working adult who is all eager to purchase a first home for himself or family, let us imagine being one of these purchasers.

It would not be difficult to realise that the first few thoughts that come to mind are the criteria mentioned earlier.

The important thoughts that come next are questions on how to get such a property and how to pay for it. This requires having a panoramic view of all the factors involved in purchasing a property and opening one's options.

Compared to purchasing a vehicle which costs less, has a shorter instalment period, does not require intensive research and mostly required for mobility, purchasing a property is one of the biggest and most difficult decisions encountered by the young working adults.

It involves searching hard for the right home, saving for the down payment before buying a home and subsequently, paying instalments for a longer period.

However, acquiring a property beats acquiring a vehicle hands down with appreciating value.

Saving to make a down payment for a property should start from early days of working life. If the savings are spent to buy a car first, the cost of owning a property will increase later due to inflation.

Apart from accumulating financial muscles, other chief considerations for buying a home are affordability, location, financial planning and desired lifestyle.

Affordability is the most fundamental consideration in acquiring the first property.

The monthly loan repayment must be within one's means without creating financial burden. It is common to see young working adults having preference for new property developments due to brand new designs and lower maintenance requirement.

However, second-hand properties will open up more choices as there are plenty of good deals at reasonable prices in the secondary market. Such properties can be converted into brand new homes after some renovations.

Closely tied to affordability is the location of the property. We normally seek housing hotspots near the city centre for own occupation or investment. Young working adults on the other hand, have tighter budgets and ought to expand the radar screen to include suburban areas.

There are many housing developments in the suburban areas which offer an ideal home environment at decent prices. Many of these developments have the potential to grow into thriving neighbourhoods with healthy population growth and proper infrastructure in place.

First home purchasers should also consider their overall financial planning. Buying a home is not the only commitment in life; the cost of living, other financial requirements such as family expenses and investment needs should be considered as well.

The ideal lifestyle is a subjective topic with different people having different preferences. Some will prefer a property that is self-contained or come with a wide range of facilities to meet their dynamic lifestyles. A high rise development would be a good option for them.

The ideal concept of “cheap, beautiful and good” in the context of buying a property especially in the major cities may be too good to be true.

There are always choices available for people buying a property if they are fully aware of all the factors involved in purchasing the property and are keen to explore more possibilities before taking the leap.

When you look out for property next time, and this peng, leng, zhengphrase crosses your mind, perhaps you should think twice and leave more options open.

FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please emailfeedback@fiabci-asiapacific.com.