Four sassy women show that nothing can beat them – not even in the face of Covid-19 when many businesses and big boys are in a quandary — as sassy style, experience, mind power, street smarts, cleverness, wisdom and compassion help them navigate their way in the days ahead. Perhaps we can sieve a nugget of wisdom or two from these women warriors of our times who have excelled in their respective real estate practices for their advice on surviving trying times.
International Women’s Day may be over, but there’s nothing stopping us from celebrating these steel magnolias who are reigning in the respective leagues of their own. In this post (MCO) Movement Control Order followed by the Conditional Movement Control Order (CMCO) epic June/July 2020 issue of YES (PropertY, PeoplE, PlaceS) Paper, even with the Restrictive Movement Control (RMCO) setting in, we profile four leading ladies from various sector of real estate on what can be done for an ailing nation already beleaguered with political fatigue, worries about the ongoing economic slowdown and now – with the lifting of the lockdown – the final big spanner in the works – brought about by the final blow of the Covid-19 pandemic of which no cure is yet in sight. Tough as steel yet armed with wisdom, experience, compassion and grace – they are trailblazers who – having risen on their own steam, have found their own answers and are sharing their suggestions on what can be done to solve today’s unprecedented problems.
Based on your area of specialisation, how can things be better run in the country?
Selected barriers to entry for new property developers to enter the market could be introduced; they must have sufficient capital – just like doctors must fulfil the houseman-ship programme for a certain number of years before embarking on the actual practice. There is a need for more stringent control in terms of the quality of property. Higher architecture and engineering standards, proper audits and checks with greater synergy between the Government and private housing sector to avoid mismatch in supply and demand.
What can women bring to the table in how things are run for the betterment of society?
It would be a good start if Malaysia can follow the global corporate governance guideline of having 30% women representation in ministries as women are more passionate, meticulous, compassionate and able to shed a different light to common issues. Women are now more educated, opinionated and independent. They can take on multiple roles balancing their responsibilities at home and work.
Any viable solutions that could be implemented to help the country get back on its feet?
The Government has introduced a host of financial aids and measures. Citizens should capitalise on these measures to maintain their disposable income and support their businesses. Likewise, private corporations should pool their funds to help B40 citizens and local Small & Medium-sized Enterprises (SMEs) by: Further improving the Malaysia My Second Home (MM2H) programme to attract more retirees to improve the rental market and take-up rates of properties for sale besides reducing the threshold for foreigners to buy Malaysian properties. Control can be exercised at the source eg. with no more than 10% to 15% of any project to be sold to foreigners. Incentives such as a waiver on stamp duty, etc. for the purchase of new properties to help reduce overhang in the next six months with free transportation – Bus, Light Rail Transit (LRT)/Mass Rail Transit (MRT) for all citizens for six to 12 months. We can do our part to support and simulate the local economy by buying local products, eating at small mom & pop shops and enjoy local retreats.
– Greater or longer term tax reliefs will be much welcomed by property owners to enable them to offer rental deferment and/or reduction to troubled tenants.
– Waiver of assessments to lower the burden of property owners.
– Wavier of Stamp Duty and Real Property Gains Tax (RPGT).
– Encourage residents to support the local travel industry.
– Local councils to organise city tours to encourage local travel.
– Companies and government agencies to hold events locally.
– Waive foreign tourism taxes and Visa fee to boost tourism.
What more can be done to heal the damage already incurred?
– The property market might hit a plateau in the short term as the economy rebalances itself.
– The focus should be to reduce property overhang and find a new equilibrium for property prices.
– Property developers may have to restructure their business and development plans to include new housing / retail / commercial concepts for the “refreshed” generation.
– Housing with a more balanced, integrated lifestyle will be the way forward.
– Demand for sub-urban retail will surge as people do not want/wish to commute too far for necessities.
– Commercial spaces will be increasingly lean as businesses move towards digitalisation, hot desks and mobile offices.
How do you maintain a healthy work life balance?
I choose to do what I enjoy, I balance work with time spent with family and friends and ensure that I have frequent breaks to unwind and recharge. Reading during leisure and getting involved in charity work to help those who are in need are my ways of taking care of my mental health. I eat healthily and have been consuming high quality Fitline supplements from Germany. I make time to rejuvenate and recharge my batteries by taking slow, long walks in the parks.
What can be done to cushion the blow following the after effects post MCO and CMCO?
Our country needs time for recovery from this huge aftermath impact of the pandemic. It is not just our country which is suffering but also the rest of the world with an increase in unemployment rate, sudden decrease in tax received, fall in currency exchange, drop in oil price, decline of export volume and depleted national reserves to help in stimulus plans. Our economy has been hit left and right by all these challenges; and it will definitely need time for recovery. The next half of 2020 will not look good for some of the businesses but I believe this hardship will not be permanent. Although there will be a slight drop in global wealth, there is still enough money to circulate the economy. There will be people who will take advantage of this economy to make more money, and there will be those who will be looking for other places to invest in. Malaysian leaders have demonstrated how our country managed the pandemic in this chaotic times and have put our healthcare on the top of the list in terms of world ranking. This will attract many other nationalities to consider retiring and investing in Malaysia and attract future Foreign Direct Investment (FDI) here. In the long run, Malaysia’s economy I believe will see a quick resurgence after the recovery. At this moment in time, many who are affected by the MCO, CMCO and also the pandemic will be uncertain about the future and may begin to lose hope so the Government should provide counselling services to them.
What will “The New Normal” be like? How will this impact the nation? Any positive takeaways?
It is time for businesses to rise to another level. It is unhealthy for businesses to stay at the same level all the time. It is human nature that will make us do better when forced by circumstances into a corner which is proven by history. The Industrial Revolution took off from the 1760s to 1820s while the second and the third revolutions happened from 1870s to 1914 and during the 1970s respectively. Each of the revolutions brought about transformation to the economy. Businesses that stay the same way will be eliminated while those which embrace change will reap rewards. Nevertheless, the journey of this change will cause pain and it won’t be a beautiful journey. I foresee many industries adopting the norm of working from home while E-commerce will be up and coming. Besides that, I believe that the economy and businesses will change entirely depending on how they operate in Malaysia. In the long run, running businesses in the digital era will save cost, utilise less work force and time. Personally, I find it much more efficient meeting via Zoom than meeting outside in person — one reason being the traffic. Thus, things will be moving faster than it used to.
What more can be done to stimulate growth in the industry and heal the damage incurred?
The Government needs to encourage more foreign investors to invest in Malaysia. As our healthcare system ranks amongst the world’s top ranking, Malaysia is able to attract more retirees to apply for the Malaysia My Second Home (MM2H) programme. The Government should lower the minimum threshold of RM1 million for foreigners’ purchase of units — and, this shouldn’t just apply to overhang units. This will help developers to sell their projects faster and help stimulate the property market. Besides this, the Government should also abolish the Real Property Gains Tax (RPGT) system temporarily as the intention of RPGT is to prevent market speculation. Property prices in Malaysia right now is pathetically low and is among the lowest in Southeast Asia. It is time for the Government to limit the number of projects that can be launched in a year. This will limit the amount of supply in the market and encourage developers to work on the same projects together rather than be in competition with one another that will kill off the market altogether.
Impact after MCO: What is the worst case and best case scenario?
From a property legal practice background, I’ve now moved into the PropTech industry. I see two extremes happening during and after MCO as well as CMCO. Conventional property law practice is being hit very badly. The number of files obviously will reduce, whilst the rebate in legal fees demanded by clients and brokers will escalate. This is further challenged by the disruption of technology in property processes and online documentation that may result in further business shrinkage in terms of conventional conveyancing practice. The worst case scenarios for conveyancing lawyers is the potential massive closure of legal firms. Legal firms keep track and store clients’ files. Once firms close down, files may go missing if the partners do not report or hand over their files to other firms or to the Bar Council. Missing property ownership documents thus could be a potential issue for property owners. In terms of the best case scenario – there is unfortunately, none.
What can be done to cushion the blow following the after effects post MCO and post CMCO? Any viable solutions to help the country get back on its feet?
Let’s face a fact. The property industry will not go back to its old normal. Therefore, we have got to be prepared for the new norm in the property industry.
The way people live, work and consume will be different. This will directly impact the property industry. Due to continuous social distancing, many will be working partly at the office and partly at home from time to time. Therefore, home layout design may be subject to more hybrid use. Affordability is another issue as this economic crisis may persist for a number of years. Thus, the affordability of owning a home may drop while the trend for residential rental and sub-letting of residences may be a popular mode in the near future. The Rent-To-Own model is something to be seriously explored.
Property sales, marketing, loan and document processes will change dramatically due to social distancing. Various technologies will be adopted by property developers and sale agents to engage with buyers. The fulfilment of sale process will be going online, utilising cloud based platforms which are paperless. It may take a bit of time for regulatory approvals and adoptions but the change will come.
When I first started proposing this notion of property E-commerce, many in the audience did not quite concur with me at that moment in time. Today though, more and more developers are engaging with their prospects through social media and key opinion leaders. Soon, property transactions will be happening online. Many people were previously opposed to this idea of buying a property without seeing the property physically since they felt that property purchase is a big decision – therefore one must see it before buying it. I suppose this is still true for secondary market properties where the physical properties are already built and can be seen and touched. For primary market sales, we who buy from developers had always been buying based on seeing the show unit and touching the brochures. We were buying off plans all this while anyway.
However, the difference now is that we are making property purchase decisions by way of utilising “digital brochures”, rather than holding “paper brochures”. The E-commerce platform for promoting clothing, shoes and other personal items went through the same evolution and revolution. As long as the purchase of property through the E-commerce platform comes with a proper refund policy and cooling off period, consumers I believe will be prepared to make that decision online eventually.
Shops and retail outlets may be facing a major blow. MCO and CMCO may be over for now. However, as long as there is no definite cure and vaccine for the virus, the risk of the pandemic recurring is real. In any event, Covid-19 is not new. The virus has continued to mutate and new strains have appeared. The world may likely have to continue living with Covid-19, with a risk of periodical outbreak recurrences. During MCO and CMCO, most of the retail brands have migrated their sales online. Consumers are getting used to or forced to shop online.
In addition, the physical retail shopping experience may no longer be a pleasant experience for consumers, with the QR tracking of every consumer who enters a shop besides facing long queues in order to space out shoppers within the retail area. Commercial property owners will also have to think of new and creative utilisation of their commercial spaces in the future.
Being an expert in real estate taxation, are there any viable solutions that could be implemented to help the country get back on its feet post lockdown?
To speak on the topic of tax and business in the face of the Covid-19 pandemic is a tricky one. Before medication is produced to cure the disease, social distancing becomes the only cure at the present moment. Social distancing has resulted in billions of ringgit of business losses, so tax collections for this year 2020 is bound to be largely reduced. It will be a good financial support for the Government to revisit their tax regime for individual taxpayers by enlarging tax relieves, increasing tax deduction incentives and reducing tax breaks of taxpayers in order to help release the tax burdens of the rakyat.
Who is the woman leader you most admire and why?
If there is only a choice of choosing one woman, i would choose Tan Sri Dato’ Seri Rafidah Aziz, the former Minister of International Trade and Industry of Malaysia. Even now at the age of 77, she is still very sharp with her speech delivery. I once attended a conference whereby she delivered a speech on corporate governance where she stated, “Let’s not talk about corporate governance if we cannot even uphold self-governance.” This statement has resided in me for a few years now and has become a nugget of wisdom I now uphold.
What will be the foreseeable impact post lockdown on the industry?
I foresee the greatest impact post lockdown being consumers’ confidence and spending behaviour not improving. This will definitely result in many companies suffering from lesser revenue, lower profits or even succumbing into loss making positions. Many businesses will be in crisis while most will experience a slowdown. Only very few selective industries will experience growth or not be affected. The good side of the current pandemic setting is that companies with excess cash flows will take the opportunity to strike deals on business acquisitions and mergers in order to further drive growth and strengthen their companies’ position in their industries moving forward. In addition, this is also when businesses could capitalise on the opportunity to reconfigure their entire business market positioning, their internal business operational flow and their human capital composition in order to stay relevant and competitive moving forward. Why a need to reconfigure to stay relevant? I believe everyone will agree that things will never be the same post lockdown.
What can be done to heal the damage incurred during MCO and CMCO following “The New Normal”?
Businesses need to look into all dimensions when looking into their revenue generation strategies under “The New Normal”. They need to seek external help if needed, in order to steer the current business model unto an online platform or by using another revenue model in order to tap market demand under “The New Normal”. The ability to capture market exposure without the ability to transform the exposure into real sales is only half the battle won. The need to create a real transaction should remain the focus of any business in order to transform market exposure into real business revenues.
One of the most important measures of business success lies in the company’s ability to generate sales that bring profits and net inflow of cash flow in order to keep a company sustainable. After all, there is really no sugar coating in running a successful and sustainable business.
The next 12 months will not be easy for all businesses, including ours. But I believe, those who invest effort to reconfigure their businesses to be relevant by staying focussed in creating value base on the new market needs and demand will be the next winners post the Covid-19 pandemic era.