Time to re-think about demand-driven property development
2020 will be remembered in history, and future generation will study and analyze it, as the year of the worst ever worldwide pandemic, the great lockdown, the new normal and possibly, as the year in which property developers, at least the majority of them here in Malaysia, started listening to the demand side and acting consequently. In other words, the year of walking the talk!
It is a fact that, starting from the first quarter of 2020, with the first wave of covid-19 in full swing and the great lockdown taking place, we all have had time to think, and re-think our way of doing business. In fact, delivering what the market looks for and not what we think it wants pays off and generate faster sales of whichever product or service your dealing with!
The majority of property developers which, for the past two decades, has mostly planned their project on the base of their architects and their own concept and ideas of conducive townships, connectivity and last but not least profitability, have had time to reconsider their planning, design and deliverable.
Understanding what precisely the market wants is a good strategic approach to a successful property development and now, even more, looking at the precise and direct demand from property seekers will help generating more conducive and definitely sustainable developments. In the next few paragraphs, we will analyze together numbers and facts to derive a more precise direction for property development to guarantee faster sales and happier buyers.
Supporting Facts and Numbers
In the new normal, needs of people in Malaysia as far as around the world have radically changed, above all those of the middle class! Let’s the numbers making the talk, it will all be much clearer at the end!
The Department of Statistics Malaysia, on September 11th, released workforce statistics (can see the infographic here) showing a total 15.82 million people were employed as at July 2020.
Another very reliable source of statistics and researches, Statista, affirmed that a whopping 63% of the Malaysian workforce is employed by the service sector.
A number of sources, supporting their affirmations with data from government, private industry and big data providers, have been confirming that as at September 2020 almost 70% of the Malaysians employed by the service industry has been and is going to keep working from home.
By doing a bit of calculations out of the numbers above, the stunning finding is that there are 7 million Malaysians that are and will keep on working from home.
Property oversupply, shortfall or…?
It is a well-known piece of information that Malaysia has a shortfall of at least 1 million residential properties priced between RM250k and RM800k.
For the past decade, property developers have been “addressing” this demand with the “mass development” of micro-studio-units, sized between 450 and 600 sq.ft. and selling them as “affordable homes”, nearby the city centre, within walking distance from public transportation, trendy design and so on. It was a trend which has been catching home-seekers, mostly still with a bachelor status and working in the proximities of the chosen development.
Then early this year, the covid-19 pandemic stroked and forced the majority of people, at least the ones employed or related to the service industry, to embrace the Work From Home mode!
Suddenly what in the past appeared to be a nice and trendy home became a small and unlivable jail cell and, in case the bachelors were no more such, the space has been further reduced resulting in laptops fighting with onions and nasi lemak and files stealing space to cloths! The young “previous-bachelors” have been realizing that it is really impossible to live-work-play from home when you call home such a small unit!
The post-pandemic property demand shift
The above statements are supported by the outcomes of most surveys on market sentiments and property buyers searching parameters which have been showing a growing demand for bigger units, floor area above 900 sq. ft.
Surveys are also confirming that the need-of-the-past for a place to call home nearby the working place, has become history. Since June this year, right after the end of the Malaysian MCO, small single or double storey terrace houses and high-raise condominiums, priced below RM700 k (for Greater KL area) and located in suburban areas, have been targeted by highly motivated buyers!
All the above gives a hopefully clear image of what the property demand is all about nowadays and, of course, few more particulars need to be considered. After analyzing the Malaysian workforce data, we now need to look at them from an age viewpoint.
The average age of Malaysians is 30.3 years, 2019 data from the Department of Statistics Malaysia. This means almost 70% Malaysians are aged below 40 years and can be classified as GenY, Millennials and GenZ. What do they like and expect to find in properties?
Digital Transformation Is No Longer An Option
Data are showing that 50/55% of those 7 million Malaysians who have adopted WFH are young professionals mostly ICT savvy and digitally predisposed. Their likes, in terms of properties, are for state of the art “plug-and-play” soft infrastructures, smart homes, digitalized property buying journey and environment-friendly & sustainable dwellings. Developers should leave aside the “brick-and-mortar” mindset and embrace as fast as possible the digital transformation wave that has been disrupting, in a very positive way, the property industry.
Developers should leave aside the “brick-and-mortar” mindset!
From booking to sales, from virtual tours of sales gallery and show house to loan application and finally till delivery of keys with defect management, everything is moving online. The digital world is that open space where the property seekers I’ve been talking of above, are very familiar with! Readers can have some ideas of what I’m talking about by following the embedded links above, guaranteed you will like it!
Last but not least, the infrastructures and features offered in a property development project could soon become the decision-making factor for our digitalized buyers. Optical fibers, high-speed internet, smart-homes features (I mean the real ones besides the digital thumbprint front door lock) are a must have together with a truthful respect for the environment by developing eco-friendly homes with a green soul! Universal design encompasses all of the above and should become a norm to start using it since planning stage!
Even though supported by facts and numbers, being this my style, the above are the Propenomist readings and forecasts of a property foreseeable future. Both developers and home seekers, let us know what you think on the above, we love to hear from you with a comment below or dropping us a message here. Stay safe and healthy and see you all soon!