There is a paradigm shift happening across the globe and many people are still clueless...so let me explain.
It is the way how people view ownership and usage.
The war generation grew up in poverty and hunger and hence avoidance of risk is the primary driving force.
The baby boomer generation is an acquistive generation.....wants to own every thing....every thing also must have.
Now is the turn of the millinium generation. This generation is used to Uber.....divorcing car ownership from usage....used to Netflix and music streaming, e books, ...you don't need to own the stuffs that you use.
The Era of asset ownership loses its appeal.....as long as you can use, why do you need to own it?
The last habit to fall under this paradigm shift is the relationship between houses and their ownership.
and....in the name of prudence , I advise people to take note of the major trends.
The baby boomer generation assumes price of houses will always continue to go up and up, albeit some years of recessions in between. Of course this is true when society is seeing mass migrations from rural areas to urban areas and the countries involved are unable to keep pace with the demand in housing. ....and in the last 10 years when borrowing rates slashed to zero in some major economies.
But population demographies are changing. Stagnating populations will cause the price of a lot of things to come down chiefly long lasting assets like houses. The primary mover of house prices are demand.....and next interest rate environment. The world has seen low interest rates for 10 years....it is ready to swing up again. The combination of all these is that it is more likely to disappoint the bulls .
What does all these mean? It means renting is not a bad idea. The war generation and the baby boomer generation never accepted the idea of renting for life. This may change. And it may be wise to change.
Renting as a life style is not such a bad idea. It offers maximum flexibility, freedom to change jobs and move, flexibility in cash flow and changing choices and lifestyles, even locations. ..Staying in rented properties until one can buy a permanent home with cash ...no liabilities, no inflexible commitments, is not such a bad idea.
People of baby boomer generation is addicted to buying houses....not just one but multiple ones because of the easy profits from property speculations in all of their adult life. This is about to change. There is a paradigm shift happening under people's feet but they may not have noticed it.
If you have any doubts about what I am saying, you can check out what is the lastest trends from the hottest property markets in the world. Even Hong Kong has seen weakening in home prices, so has Singapore, Australia, even China. Some experts even wrote that London may see a 35% drop in property prices if there is a hard no deal Brexit.
That brings me to the next point. About the recently announced p2p housing scheme and the FundMyHome scheme option.
I see this as a hallf way house between full ownership and rent option. As such, it will be popular and will have its cllientele, no matter what critics say. ...and there are plenty of critics in i3.
Under this scheme , the home buyers take up a 20% equity stake in the house...shifts in with no interest costs, no installments and no rentals. This is very attractive.
And the best part......if property market plunges the worse he can do is to lose the 20% money. Under the mortgage option, not only would the buyer have lost all their deposits and paid lots of interest costs to the bank...he willl still owe the bank lots of money and still commited to pay the bank for installments on a very expensive house for the next 30 years.
Assuming no change in house prices, the buyer have the option to convert into traditional mortgage at the end of 5 years or to sell it.....the 20% money is still with the buyer, untouched. ...and he can use it to fund another p2p house for next 5 years, rent free, no interest expense and minimum risk...and on and on...until he finds enough money to buy his mansion for cash.
Be aware. Be prepared for paradign shift. It is surely coming. In future, assets and asset ownership have a whole new meaning different from those of the baby boomer generation. It will happen to cars, houses........and even shares........The younger generation is already not as interested in sharemarket as the baby boomer generation.
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good bye wallen buffalo wannabes...I see your group as dinosaurs or soon to be dinosaurs.......
Now many ppl msian stay in container homes..
Soon they may live in mobile homes like in the US..
So they never have to be burden with debts..
Mobile home + 24 hour gym membership to take shower..
///Hush77:- Mobile home + 24 hour gym membership to take shower..
11/11/2018 00:03 ///
And let the theives steal your mobile home becos it is movable. Hahahahaha
Paradigm shift: It is better to buy & own cheap or cheaper assets (like car, house, handfon & etc), than renting.
If you sell them later, at least they are depreciating not a lot like when you are buying expensive assets.
Renting is more expensive in the long run. And you can be chased out anytime the landlord want to take back assets.
the property owning class do not do revolutions.....
so, it is no surprise every government encourages people to be property owners.......
the only issue is....is it toppish or not?
It will happen to cars, houses........and even shares........The younger generation is already not as interested in sharemarket as the baby boomer generation.
That means what? That means we Malaysians will also follow the trend in the West where people have given up on stock picking and will park their money with professionals who practise diversification strategies.