Malaysia's Generation Z, born between 1995 and 2005, is increasingly transitioning from renting to homeownership, according to data released today by property giant IQI, a member of global proptech company Juwai IQI.

Juwai IQI Co-Founder and Group CEO Kashif Ansari highlighted the significance of this shift, noting that homeownership is a crucial step for Generation Z in securing their financial future. "Over the past two years, Generation Z's share of home purchases has risen from 17% to 26%. While they still lag behind Generation Y, who account for 50% of purchases, the trend indicates that Gen Z is following a similar path as previous generations, moving from renting to owning as they come of age," Ansari explained.

In 2019, when the oldest members of Generation Z were just 24 years old, they accounted for only 3% of home purchases. Today, their presence in the real estate market has grown significantly, with 26% of all purchases attributed to them. To match the homeownership rates of previous generations, Generation Z will need to increase their share of purchases to around 60% in the coming years.

Despite their current tendency to rent, Ansari emphasised the importance of transitioning to homeownership for financial stability. "While it's natural for younger individuals to start with rentals, it's crucial that Generation Z begins moving towards owning their homes to build wealth and benefit from property appreciation," he said.

Over the past decade, property ownership has proven to be a lucrative investment in Malaysia. The median homeowner has seen the value of their home increase by RM136,716, with those holding a mortgage earning a median return of 66% on their investment.

As one of Malaysia's largest demographic groups, making up a quarter of the population, Generation Z is expected to play a vital role in driving the nation's economy.

With their youth, education, and international mindset, they are poised to contribute significantly to economic growth, business development, and tax revenue in the years ahead.

Ansari estimated that each member of Generation Z will earn RM1.6 million over their lifetime, collectively adding RM13.4 trillion to the economy through personal earnings. This projection is based on the current median formal wage of RM2,645 per month over a 50-year career, not accounting for potential future wage growth.

As Generation Z continues to age, their impact on the housing market and broader economy is expected to grow, further solidifying their importance in Malaysia's economic landscape.