Getting hired in a competitive job market is tough – what more if one is a fresh graduate struggling with the high cost of living and steep rent rates in the city.
Accommodation in urban areas, in particular, said International Youth Centre (IYC) director Dr Mohamed Maliki Mohamed Rapiee, poses a significant challenge due to high rent rates and deposits, often requiring rentees to allocate a substantial portion of their starting salaries.
IYC, which is under the patronage of the Youth and Sports Ministry, is an institution for international youth development programmes and a hub for non-governmental organisations to establish their offices here.
Fresh graduates, he said, opt for spaces closer to their workplaces but rent spaces near central business districts (CDB) often come with a high price point.
Mohamed Maliki“What many fail to realise is that affordable living spaces are not located strategically and the ones that are strategically positioned come with a hefty price tag. That is the issue,” he said.
In September, the Youth and Sports Ministry launched the Youth Capsule (Y-Capsule) @IYC Residence, a hostel facility for youths and jobseekers in the city.
The Y-Capsule @IYCResidence located within IYC is also equipped with the facility that boasts five dormitories containing 54 beds, a kitchen, a self-service laundromat and Internet access.
The initiative was made available to Malaysian citizens aged between 18 to 40 for RM10 a day to curb the issue of expensive rentals in big cities like Kuala Lumpur.
Mohamed Maliki said the Y-Capsule’s location at the IYC Residence in Bandar Tun Razak, Cheras, is strategic and offers accessibility to various city amenities and transportation hubs, facilitating easier commutes for its residents.
ALSO READ : Down with discrimination
“Since its launch, we’ve seen a significant uptake, with positive feedback from residents on the affordability and the convenience it offers,” he said.
Quoting a recent property market report, he added that rental demand has been declining due to a significant rise in rental asking prices.
As landlords keep raising rents due to higher living costs and interest rates, housing affordability is likely to become a pressing issue, he said.
“The combination of diminishing demand and rising rental asking prices can potentially escalate the problem of housing affordability, especially for those with limited income,” he said.
TehCiting a recent rental property management site study, he said over six million Malaysians currently rely on room rentals, especially students and young working adults aged 18 to 39.
High housing costs make apartments unaffordable for them, so room rentals are their only viable option.
“This issue has far-reaching implications on the financial stability and potentially the mental well-being of the younger population,” he said, quoting the survey.
Last year, a survey by the Tun Tan Cheng Lock Centre for Social and Policy Studies at Universiti Tunku Abdul Rahman found that almost 85% of youths said they felt pressured due to the rising cost of living in the country.
Be strategic
Fresh graduates who are looking to start their careers in a CBD, said real estate specialist Kevin Teh, must be strategic.
Wong“Explore job opportunities that offer higher pay. If that proves challenging, contemplate co-renting with fellow graduates during your initial year of employment.
“If you prefer having your own space, consider renting in areas that are outside the CBD,” Teh, who is also the team lead for a real estate company, suggested.
A city with a larger population density is likely to result in higher rental prices, he said, adding that cities with smaller populations tend to have lower rent prices.
Most importantly, fresh graduates and interns alike must do adequate research on the rental price for the property or unit type to be able to better negotiate a fair rental price.“It is important to know your rights to negotiate even if you have never rented a place before. It is not worth wanting the best of the best when it’s not in your best financial interest,” he said.
The general rule of thumb, said Teh, is that tenants should not allocate more than 30% of their gross income for rent.
He said fresh graduates may require the remaining portion of their budget for utilities, food, transportation, insurance, entertainment, and other essential needs and wants.
The average rental for a studio apartment in the city can be as high as RM1,500 while that for a three-bedroom apartment could cost double.
“Even a small room, especially one located near central locations, can be unbelievably expensive.
“There are even rooms that rent for RM6,000 per month. This is not inclusive of utility bills and parking lot charges,” he said, adding that sharing the space with other tenants could reduce expenses by RM200.
But sharing a room or apartment has its own set of challenges, said Nivesh Naga Raja.
The Perakian, who has been working in Kuala Lumpur since last year, has nearly exhausted his savings trying to stay afloat while looking for a cheaper place to stay.
“I need to find a cheaper place to stay or a higher-paying job soon.
“For the past couple of months, I have been working part-time as a food delivery rider after my shift ends so I make just enough to survive.
“Rent and groceries are expensive here and I just do not earn enough to save,” he said, adding that while there are many rental properties available in KL and Selangor, only a fraction are within the reach of fresh graduates.
“Even if you opt for shared accommodation, which is often more budget-friendly, the living conditions are typically less than comfortable,” he said, adding that there is also the worry of whether the co-tenants will pay their share of the rent on time and whether they will help keep the house clean.Fresh graduate Riya Gunvantrai Patel said property agents tend to be unreliable at times and with the high cost of travelling, it may make more sense to spend more on a room that is nearer to the office.
“Agents help you scout for affordable homes but these are often located far off from the city and you would have to travel long distances just to get to work.
“Travelling back and forth between work and home can be quite expensive,” she said.
Need for negotiation
Multimedia University (MMU) Student Experience and Entrepreneurship Development vice president (VP SEED) Prof Dr Wong Eng Kiong stressed the importance of negotiating well to ensure that students can cope with the living expenses.
Students, he said, must negotiate both rent rates and their internship or starting salary package to sustain themselves.
The salary package is intricately connected to the living standards in the work area and individual productivity, he said.
“Students, particularly those undergoing an internship programme, understand that not all companies provide transport or living allowances.
“One way to solve this is to find an internship placement at a student’s city of origin so that they can stay with their parents.
“Alternatively, the students can stay at the accommodation provided on campus and find weekend jobs to sustain themselves during this period,” he suggested.
Wong said fresh graduates should not dismiss job offers in second-tier cities as these locations may have nearby accommodation that is accessible to public transport.
This, he added, can be effective in managing accommodation cost.
The government also needs to put more effort in providing public transport or mass transit services near residential areas to help control the rising cost of living, he offered.
Faizatul Syamin Liyana Fadilah said options are limited in hotspot areas so fresh graduates like her will have to decide between paying cheap rent for an uncomfortable room or fork out more than half of their salaries for something more comfortable.“I had previously applied for the Sumbangan Tunai Rahmah (STR) cash aid to help with rent when I was still a student, but my application was rejected as I had started working and my income slightly exceeded the RM2,500 criteria,” the Universiti Teknologi Mara graduate shared.
Next year, the cash aid rate under the STR will be raised under Budget 2024.
The maximum rate will be increased from RM3,100 to RM3,700, and the minimum amount will be raised from RM350 to RM500, Prime Minister Datuk Seri Anwar Ibrahim announced when tabling the budget in October.
The financial aid, especially with the higher STR bracket, said Faizatul Syamin, would come in handy for many fresh graduates and interns.
While welcomed, the STR would contribute no more than 5% of rent expenses, she said, adding that the rising cost of living is a struggle for many.
‘Make rent affordable, raise our salaries’
The government, or even landlords themselves, should introduce more pocket-friendly accommodations for fresh graduates. Landlords should be more open-minded when it comes to selecting tenants. Let all interested parties view the place. Meet us and find out more about our backgrounds and our living habits before straight-up rejecting us without a valid reason. If you still feel uncomfortable after that, then don’t offer us the place. The salary of fresh graduates, especially for those working in companies in central KL, should be increased. The starting pay for those of us living in KL is insufficient. We are struggling to survive, what more save. It is truly disheartening.
Neha Bhubhindar Singh, 23
Tax exemptions can help to promote more cost-friendly rental homes. When Budget 2018 was tabled, the government announced a 50% tax exemption on rental income not exceeding RM2,000 per month for three years. This should be brought back because though the gross and net rental income rates vary due to deductible expenses, they are still interconnected. Landlords will not impose such a high monthly rental fee if they do not want to pay tax. Meanwhile, house-hunters should look out for flaws in the property when viewing the place as this could be useful when negotiating the rental.
Vanessa Bridget Stephen, 24
