As property prices rise due to the ever-increasing land costs and material costs, property buyers and investors are having to charge higher rental for their investment yield to bring returns.
This also further leads to a gap between young people’s rental affordability and rental asking. Overall, this gap is growing larger.
“There is a big gap in young people’s living needs in the central cities. Properties development in the urban cities are getting more expensive, from young people not being able to purchase, to having problems in rental affordability,” says Wen Khai, Co-founder and Chief Executive Officer of LiveIn.
“While young people’s salaries are around RM2,000-RM3,000, one fully furnished studio in Klang Valley is easily RM1,500, one partly completed condo unit is easily RM2,000 or more. Some property directories may bring tenants to possible lower budget, but housing conditions might be sub-optimal, or people must do long-hour travel,” he adds.
Khai also highlights that the problem of high overhang properties is due to the oversupply of properties and the income level young people remain in, leading to the problem of unaffordability.
In its effort to combat this issue, instead of renting out the entire unit as whole for RM2,000, LiveIn rents RM800 per room, fully furnished, equipped with high-speed WiFi, cleaning, and maintenance services. All these are accessible through their app.
The company currently covers condominium buildings, which comes with facilities and amenities for their tenant community. It also regularly hosts community events for their tenant community to help tenants socialise and transition to their new environment.
LiveIn is also looking to match as many of the available properties in the market to young people.
How has Covid-19 Affected The Segment?
“The pandemic has brought some changes to the way people rent and afford properties. People who previously had higher budget to rent or rent share an entire unit, are undergoing uncertainty about it now.
“People are also considering downsizing their living standards and millennials are not looking to buy property, instead are seeking rented places that match their lives’ flexibility and offer better lifestyle experiences,” Khai says.
Last year, the company launched the Pay-What-You-Can campaign in April as well as virtual room tours and Flexible Terms to help as many new tenants as they could.
What does the future hold?
“The 2020 experience as been challenging and encouraging at the same time. While initially last year, we struggled in juggling with our necessary SOPs, we came up with new solutions. These steps really helped us to bounce back into business and continue supporting our customers,” Khai says.
The company was supported by Cradle Fund when they first started and have engaged with MAGiC and MDEC later on.
In the short-term, the company is aiming to cover a larger geographical coverage in Malaysia in the coming future, providing the same support to owners, allowing them to rent available empty properties to young people at an affordable rate along with better and more comfortable living experiences.
In the long-term however, LiveIn hopes to expand regionally to other countries in the SEA region.
“Initially, we were planning to look into Indonesia and the Philippines, however due to Covid-19, we have decided to retain our focus on Malaysia for now.
“We also hope to be able to work with more authorities in time to address the macroeconomic issue of meeting young people’s living needs in central cities,” Khai says.
