Gen Z finds it difficult to buy a house, not simply because they do not want to, but due to economic and social conditions that make homeownership increasingly challenging.
Currently, Gen Z is estimated to account for 27.94% of Indonesia's population aged 15–29 years. However, in reality, many of them find it difficult to own a house due to the rising prices of business property and the increasing cost of living.
In addition, Gen Z has lived through two major crises, which are the global economic crisis of 2008 and the COVID-19 pandemic, which have also impacted the financial stability of their families and their ability to save money.
So, what are the main reasons why Gen Z finds it challenging to buy a house, and how can they overcome this situation? Read the full explanation in the following article.
Reasons Why Gen Z Has Difficulty Buying a Home
One of the primary reasons Gen Z has difficulty buying a house is the continuous rise in property prices year after year. This price increase is not proportional to their income, making homeownership feel increasingly out of reach.
The relatively low average monthly income of Gen Z is one of the main factors that make it difficult for them to own a home, both in the short and long term.
In addition to these factors, there are several other reasons why Gen Z struggles to buy a home. Here is the explanation:
1. Rising Property Prices
Although property prices declined in 2020–2021 due to the pandemic, they continued to rise until 2022 and are expected to continue growing until 2024. This situation widens the gap between property prices and the income of Generation Z and other young generations.
Although Gen Z's income is relatively stable, the imbalance between income growth and property price increases makes homes increasingly unaffordable. This shows that the challenge of buying a house does not only come from limited income, but also from property market dynamics.
2. Unable to Pay Mortgage Installments
Mortgages remain one of the most accessible options for young people to own a home. However, surveys show that 10.49% of millennials are unable to pay mortgage installments, meaning that this method does not fully meet their needs.
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3. The Impact of Technological Advances
According to the Financial Services Authority (OJK), digital advances have made it easier to apply for loans, including through fintech applications and paylater services, which previously could only be done in person.
However, this convenience has not been matched by sufficient financial literacy, which risks encouraging Gen Z to take on debt to fulfill their immediate desires, creating a dangerous cycle of debt.
This advancement in digital technology is also evident in the increasing popularity of online shopping, ticket booking, and food delivery apps, which make it easier for people to access e-commerce and take advantage of large-scale promotions.
While these platforms make transactions easier, this habit can increase the tendency toward impulsive spending. Therefore, it is advisable to use technology wisely to ensure healthy financial management.
4. Competition in the Job Market
Gen Z faces fierce competition in the job market. According to the Central Bureau of Statistics (BPS), in 2022, there were 937,176 job seekers in Indonesia, making competition even more intense. On the other hand, the Regional Minimum Wage (UMR) is often not comparable to housing costs.
In some areas, the UMP is only half the price of the cheapest houses, making it even more challenging for Gen Z to find jobs that provide enough income to afford a house.
5. Not Thinking About Owning a House Yet
Most Gen Zers say they do not need a house yet, while millennials say they are not currently thinking about owning one.
Additionally, other reasons underlying the low interest or inability of the younger generation to buy a house are the annual increase in property prices and other financial factors.
6. Struggling to Access Credit
Strict credit requirements and high interest rates pose additional challenges for Gen Z. The lack of a stable credit history makes it hard for them to get a mortgage approved.
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7. Consumptive Lifestyle
A consumptive lifestyle driven by social media and the desire to follow trends has led some Gen Z to prioritize entertainment and luxury goods over saving.
Tips for Gen Z to Buy a House
Despite the challenges, Gen Z can still start planning to own a house. The way to achieve this is to set targets, save early, and look for additional income.
Moreover, avoid a consumptive lifestyle and pay off debts to achieve greater financial stability. Here are some practical tips for Gen Z to afford a house.
1. Set a Target
The first step is to set a savings target based on the price of your dream house. That way, you can allocate a portion of your monthly income to save regularly.
Keep in mind that house prices continue to increase annually, therefore, it is also important to calculate the potential future increase in house prices.
2. Start Saving
Setting aside a portion of income is one way to save for a house. If you have been keeping from your remaining salary, it is best to change that habit.
Determine the amount of funds to be saved from the start and allocate them using different accounts. This method helps control spending and limit the use of funds more effectively.
3. Look for Additional Income
In addition to saving from your main income, consider additional income. This extra income can come from side jobs, freelance work, or small businesses, which will help you reach your dream house savings goal faster.
By adding additional sources of income, you will be able to save more money and reach your goal sooner.
4. Avoid a Consumptive Lifestyle
If you are still accustomed to splurging on unnecessary things, it is best to stop this habit now. A consumptive lifestyle is the main obstacle to saving money.
If you already have a goal to buy a house, every expense needs to be appropriately recorded. That way, the money you earn is not wasted, and your savings remain optimal.
5. Pay Off Debts
Before you start saving, ensure you have paid off all your debts or loans first. Debt can be a significant burden, making it difficult to manage your finances effectively. Once your debts are paid off, you can focus more on setting aside funds to buy your dream home.
Understanding the various reasons why Gen Z finds it difficult to buy a house can help you realize that the challenge is not only financial capability, but also economic stability and the ever-increasing cost of construction.
Therefore, when the opportunity to own a house finally arises, whether as a personal residence or part of an investment, choosing the right construction materials is crucial for maintaining the building’s quality in the long term.
One option that supports the construction of a strong, durable home is a product from Semen Merah Putih.
You can use Semen Merah Putih Watershield, which features water-repellent technology that helps prevent water seepage and reduces the risk of mold growth on walls.
Additionally, concrete needs for construction can also be met through Beton Merah Putih, which offers a range of products, including Precast Concrete and Ready Mix Concrete.
If you plan to build or prepare a house in the future, high-quality building materials will be essential.
Contact us for more information and get reliable construction solutions to bring your dream house to life!
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