Property Landscape In Malaysia: How Is It After Prolonged Lockdowns?

As cliché as it may sound, there are only three words to describe the property market now in layman terms: Uncertainty, uncertainty, uncertainty!

And this is not just an industry-specific issue, but one that impacts the whole of our nation’s progress, despite more upcoming relaxations to the lockdowns.

So, what are we supposed to be looking out for, that might improve or worsen the currently bleak conditions of the property landscape in Malaysia?

While no one has a crystal ball to foresee the impact that the prolonged lockdowns will have on our nation, one thing is for sure: Uneasiness is at an all-time high, especially among genuine homebuyers for three major reasons.

Malaysia has one of the highest vaccination rates in the world today, and this may prove to be a silver lining for many looking forward to resuming their former normal lives.

However, there is still the very real risk of further outbreaks by other variants such as the Delta Plus and Lambda.

We cannot afford another wave to hit us, especially with the current high in daily death rates that have taken a massive toll on our healthcare system, not to mention the already weakened economy.

Our business community may have thought that it had seen the worst since the last recession, but then came the current crisis, which is truly unprecedented.

It has wiped out many small- and medium-enterprises (SMEs) as well as local businesses, after the month-on-month lockdowns in the country were announced with no specified period of time, and no end in sight until recently.

While some businesses can resume operations and therefore revive jobs in the market, property demand may take a much longer time to build up, as the overall market is cautious about the outlook and the focus on livelihood is still the main concern.

Despite our country bravely fighting off its worst ever battle against an invisible enemy, the white elephant in the room has to be our very own political drama.

What the nation needed was a stable government to lead us out of the pandemic, yet now, we have witnessed our third Prime Minister sworn in within a span of just three years!

Without any clear and strong leadership to steer us back to recovery and growth, we may only see more activities post-election.

The long-awaited announcement in August 2021 to revive the Malaysia My Second Home (MM2H) visa programme was very much welcomed.

Introduced in 2002, but shelved in 2020 when a change of government took place, the MM2H programme was a scheme that promoted Malaysia to potential residents from abroad as a desirable place to live.

This does not bode well, even for the existing visa holders, not to mention trying to attract new foreign funds for asset acquisitions.

In addition, existing MM2H participants who cannot meet these requirements will likely dispose of their assets here (at a discount because of excessive supply), and leave.

With similarly attractive immigration policies in the region such as Philippines’ SRRV programme and Thailand’s Elite visa, Malaysia may no longer be the preferred destination for those who are considering South East Asia as their new base of residence.

What the country needs right now is to ease these policies and make it less restrictive for foreigners to contribute to our gross domestic product, as a means to stimulate the local property market, not otherwise.

This is obviously the better move to make, which can be seen when the Sarawak state government chose not to follow and implement the Federal blanket of new MM2H rules within their jurisdiction.

As the current digital transformation (hastened by the COVID-19 pandemic) takes place in our daily lives, it is fast shaping how we work and live.

The property sector is also subject to such disruption, although the brick-and-mortar industry requires more time for innovation and adoption.

Every stakeholder – valuers and builders, to sales agencies, bankers, lawyers and even homebuyers themselves – will have to learn, unlearn, and relearn to embrace the new way of transactions with immersive experiences.

As these behavioural changes take place, we will see a shift of culture and the rise of property technology in the real estate industry to unveil in months and years to come.

PropTech transformation is definitely here to stay. Despite all the unpredictability of VUCA (Volatility, Uncertainty, Complexity, Ambiguity) in the landscape of today, it also means the bottoming of the property market has arrived!

For those who see the opportunities in the face of the current crisis we are all facing, there has never been a better time to enter the market and optimise their real estate portfolios.

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