By LEE YAN LI lylee@thestar.com.my

Does working harder help in property buying?

Young attractive couple in love happy together planning and pointing blueprints, floor plan and design of new house, home, flat or apartment imaging the distribution of the rooms in real state concept

WHAT does a second job have to do with buying a property?

For those of us who are born without a silver or golden spoon, and short of inheriting one from parents or some mysterious wealthy distant relative, it would be normal to assume that owning a home would be through our own effort and ability, which means getting the “dough” is the determining factor.

Our career, being one of the most common ways of earning money, is among the most reliable ways to save up to purchase a property. But when one job is not enough, why not consider another?

Are Gen-Y keen on working more to buy a house?

 While most young people agreed a second job could be a way out, the reality is that most of them don’t even seem to be thinking of it.

“Most of my peers would like to buy a house, and they have dabbled in financial planning and investment to achieve the goal, but maybe only one or two out of ten are working a second job,” said Ow K. H., an office executive who said a second job is a viable option if he decides to commit to homeownership.

He said while there are plenty of options when it comes to temporary employment, the choice is rather limited when it comes to a part-time job that complements the gruelling working hours of a permanent employment.

“It depends on expertise and professional fields, like a graphic designer may be able to find freelancing opportunities,” added Ow.

He said this lack of initiative among his friends seems to stem from a reluctance to step out of their comfort zone, although the gruelling and longer working hours when adding in an additional job is also a likely factor.

“However, I have friends that embark on a second job and realise that it pays better than the first job, and end up switching their careers,” he said.

“There are simply not many part-time hiring that allows for a flexible schedule. Most part-time employment demands a certain commitment and it is hard to accommodate the schedule if you have a full-time job,” said Yap R. P., a 30-year-old marketing executive.

She said in the case of her friends who are struggling to buy a house, financial investment is the more common tool to prepare the funds.

For future graduates who will be facing the same issue, housing affordability might be a concern, but there is still a lack of a sense of urgency.

Liong Y. L. said while she has plans to buy a house within the next five years, her current savings are likely to be spent on travel expenses.

The 22-year-old accounting student said she is able to earn RM100 to RM200 for a one-day stint working in events.

How do other Gen-Ys do it?

 Facing a softening property market for the past few years, the main concern is it’s increasingly difficult for young people and first-time homebuyers to acquire a property. Stakeholders are offering different solutions to remedy solutions, the government offers various housing subsidies and schemes, the developers offer promotional packages to entice prospective buyers, and numerous financial coaches offer tips on house buying, but the sure-fire way to achieve home ownership still depends on the buyers.

It is not just a matter of saving up the cash for the down payment, legal fees and stamp duties.

Picture yourself buying a house, what would be the common criteria taken up by the bank despite their different ways of evaluating a loan application?

Would the applicant be able to repay the mortgage with his or her income source?

In 2012, Canadian Sean Cooper became a small media sensation when he paid off his $255,000 (approximately RM870,000) mortgage in three years and two months, by living frugally and yes, working three jobs.

In Hong Kong, a city of notorious high living expenses and expensive house prices, the workers have earned a nickname of “7-Eleven” due to their workings hours from 7 am to 11 pm. Some reports said 30% of Hong Kong’s workforce is involved in part-time employment, which translated to additional earnings of HK$4000 (approximately RM2,285), aside contribution for the mortgage payment.

According to research by Khazanah Research Institute and Demographia, Hong Kong’s housing affordability rating is at an alarming rate with a Median Multiple of 18.1, meaning a house would cost them 18 years of annual income on average.

The reports showed Malaysia’s major market Median Multiple was at a seriously unaffordable 4.6, while Kuala Lumpur had a severely unaffordable Median Multiple of 5.4 in 2014.

Kelly Services, an employment agency & recruitment company, said with an average salary of RM1,200 to RM2,000, and approximately of 40.7% of income spent on markets for basic necessities.

According to Kelly Services data for 2016, the ratio between permanent hires versus part-time is 11% and 89%.

Time by the dime

Compare to some other countries, an additional job seems to be an afterthought for most Malaysians.

Crowdsourcing Industry Association of Malaysia (CIA-Malaysia) president Michael Tan opined that the part-time job culture in Malaysia is less prevalent when compared to other countries, as people are usually less serious when it comes to temporary employment.

“Although the cost of living is going up, it is considered manageable, there is no strong incentive to embark on a second job, so most people hold a second job for fulfilment or leisure. This resulted in lesser commitment on the job, and employers feel less inclined to offer part-time employment as it is harder to manage them,” he added.

Tan said most companies would prefer to outsource tasks rather than hiring a staff to handle part-time assignments, which is why outsourcing company has been doing quite well in Malaysia.

When it comes to part-time employment, he said one has to distinguish between skilled and non-skilled jobs. In general, roughly 70% of these jobs require little or no skill, but the job to applicant ratio is approximately 1 to 50, while for skilled jobs, the ratio is around 1 to 20.

Higher value and skilled jobs include transcription, software testing, design, market research, programming and others.

However, he also said part-time employment, unlike some countries such as Australia, has no guarantee of minimum wages, which creates the possibility of abuse and improper treatment. This has contributed to lower interest in those seeking part-time employment.

“On average, the wage per hour would be around RM7 to RM10, F&B industry pays approximately RM7 per hour, brand retail workers from RM6 to RM8. It is considered good enough to attract employees, but not enough to retain them.

“IT industry pays better than the average, while Uber and GrabCar drivers’ earnings are also above market average, with an estimation of RM15 to RM20 per hour,” he said.

On the other hand, Chur Associates founder and managing partner Chris Tan disagreed that the country should regulate part-time employment, as the free market dynamic creates a more competitive job market.

“Theoretically, part-time jobs pay better than permanent employment, while permanent employment provides security of tenure,” he added.

In his opinion, one could always refuse an offer if the term is not good enough.

“The reality is single income today is hard to get a mortgage. Last year's high loan rejection rate also showed most of the loan applications being approved were based dual income, and it could be husband and wife, boyfriend and girlfriend or with family members.

“The problem with second income is how do you prove it? If you want the second income to assist you to get loan approval, you have to assure the bank that it is a regular source of second income, so they will recognize it as part of your ability to repay the loan.

“If you don't declare your second income, the second income will only help you pay the deposit, instalment and so on,” he said.

He suggested that ways to prove sufficient income generation include payments in forms of EPF, taxes and GST contribution.

Applying a credit card will also provide a track record of one's financial ability, as it will involve proof of income, payment record and so on.

While there is generally no legal restriction on employee seeking side income outside their formal employment, unless stated explicitly in the employment contract, Tan said those who are concerned with complication arises from the situation could reach an understanding with their bosses or companies.

He also said there may be restrictions for employees in public sector or members of professional bodies.

Flex work to unlock potential of financial empowerment

For those who want to buy a house to start a new family, a flexible work life that boosts female labour participation could also be the key to achieve homeownership.

Talent Corporation Malaysia Bhd's flexWorkLife.my campaign is promoting another way to tackle the issue of additional income sources for young families.

TalentCorp chief executive officer Shareen Shariza Abdul Ghani said the flexible work arrangements (FWAs) included telecommuting, compressed work week, part-time, staggered hours and school holiday work arrangement.

These flexible arrangements helped women to participate in the workforce in conjunction with their family commitment.

“Coupled with its Career Comeback program, Malaysia’s female labour participation rate (FLPR) climbed to 54.1% in 2015, up from 46.8 % in 2010. Based on World Bank estimates, this 7.3% increase resulted in an additional 750,000 women entering the labour force, over and above contributing an additional 0.3% GDP growth per annum,” said Shareen.

Not to mention, this comes with the financial empowerment that strengthens the family's financial position.

Some might be nostalgic about the days when a single income is sufficient to support the family and buy a house, but when life gives you a lemon, make lemonade.

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