Savvy measures, wise purchases

“WHILE inflation, increasing cost of living and the demandsupply mismatch between what the market wants and what developers are building do present real challenges in the Malaysian property market, the first steps towards the wise purchase of property is acquiring financial literacy and living within your means,” says Khalil Adis, founder of Khalil Adis Consultancy Pte Ltd.

Having recently launched his book Property Buying for Gen Y, Khalil observes that many young Malaysians are riddled with education and credit card debt as they have not been properly educated on financial matters.

This not only makes it hard for them to service a loan – those who cannot control their finances are also less likely to be able to make sound asset purchases or obtain a loan in the first place.

He advises first- time homebuyers to calculate their income- to- mortgage ratio as a preliminary measure of affordability – the mortgage payment should be less than a third of your gross income for the property to be within your means.

This axiom works best on the condition that your first property purchase will be for your own residential purpose and not leasing.

Those looking to purchase property solely for returns on their investment should consider commercial development in the south, which is relatively scarce compared to residential developments.

As Klang Valley businesses spill over, Negri Sembilan, Malacca and Johor will support the south- bound growth, thus increasing the demand for office buildings, retail lots and the like.

Besides that, investors could consider shifting their focus to the secondary market, which is not as heavily regulated as the primary housing market.

Besides being able to negotiate prices with owners eager to let go of their property, investors in the secondary market could also work out an exclusive deal to acquire controlling rights for a certain period without purchasing the property.