Gen Z & Real Estate: Why They’re Choosing Stocks Over Homes

Introduction

Not too long ago, buying a house was considered the first big step into adulthood. Our parents often reminded us that “rumah dulu, baru fikir benda lain.” Owning a property wasn’t just about shelter, it was a symbol of stability and success.

But today, Gen Z is rewriting the playbook. In the U.S., many young people are saying no to mortgages and yes to stocks, ETFs, and even crypto. And here in Malaysia, we see the same pattern: soaring property prices, slower income growth, and a generation that values flexibility.

So, is Gen Z making a mistake by delaying homeownership or are they actually smarter than the generations before them? Let’s dive into the global trend and see what lessons Malaysians can learn.

1. The U.S. Housing Struggle

To understand Gen Z’s choices, let’s look at what’s happening in America:

• Mortgage rates have surged past 7%, doubling from just a few years ago.

• Median home prices now exceed USD 400,000 (around RM1.9 million).

• Many young workers face student loan repayments, making saving for a down payment even harder.

In short: even if they wanted to buy, affordability is a huge barrier.

So instead of committing to a 30-year mortgage, Gen Z invests in stocks, ETFs, and REITs where entry costs are lower and liquidity is higher.

2. The Malaysian Parallel

Sounds familiar? In Malaysia, the property dream is also slipping further away:

• Median property prices hover around RM430,000.

• The average household income is around RM7,000–8,000 per month.

• To buy a RM430,000 home, you’d need at least RM43,000 upfront (10% down payment + legal fees).

Many young Malaysians realize that’s equivalent to years of savings without even considering renovation and furnishing costs.

Instead, renting for RM1,500/month while investing the difference seems like the smarter play.

3. Why Stocks Are Attractive to Gen Z

a) Lower Barriers to Entry
A lot of platforms currently let Malaysians buy global stocks with as little as RM100. Compare that to property, where the minimum commitment is easily five or six figures.

b) Flexibility & Liquidity
Need cash urgently? Selling a stock takes minutes. Selling a property? It could take months, and you might even sell at a loss.

c) Diversification
One property ties you to one location. Stocks and ETFs let you spread risk across industries and countries.

4. But Don’t Write Off Property Yet

Of course, property still holds value:

• A mortgage forces discipline—you’re essentially paying yourself in the long run.

• Good properties in prime locations appreciate steadily.

• Most importantly, you get a roof over your head.

So the right question isn’t “stocks or property?” but “when should I buy property?”

5. Example: Renting + Investing vs Buying Early

Let’s compare two 28-year-olds in Kuala Lumpur:

• Person A buys a RM400,000 condo. Monthly repayment = RM1,800 (assuming 4% interest over 30 years).

• Person B rents a similar unit for RM1,500 and invests RM1,500/month into ETFs earning 7% annually.

After 10 years:

• Person A has paid mostly interest, with maybe RM80,000 in equity.

• Person B’s investment could grow to ~RM250,000.

Of course, Person A still owns an appreciating asset—but Person B’s liquidity and compounding power shouldn’t be underestimated.

6. The Balanced Approach

Instead of choosing one side, Gen Z can adopt a hybrid approach:

• Rent while investing aggressively in your 20s and 30s.

• Buy property later when your income and savings give you more options.

• Consider REITs  to enjoy property-like income without the heavy capital outlay.

Closing Thoughts

For Gen Z, delaying property isn’t about rejecting stability, it’s about adapting to reality. In both Malaysia and the U.S., affordability challenges are real. But with smart investing, the property dream doesn’t die, it just gets delayed until the timing makes sense.

So don’t feel guilty if you’re renting. As long as you’re investing consistently, you’re still building your future.

Disclaimer :The content above is for educational purposes only and does not constitute financial advice. Any references to apps, services, or investment options are for illustration only and should not be interpreted as recommendations. Always do your own research or consult a licensed financial advisor before making financial decisions