Higher income status will help grow real estate sector

We are in very interesting times when changes are happening in almost every sphere of our lives and in every part of the world. We are certainly experiencing first hand the age old saying that “the only constant thing is change”.

With change comes challenges and opportunities. To avoid being left behind, all alike from the common folks to governments and organisations should be proactive and take the necessary steps to be part of the big wheel of change.

One of the big changes underway for the country is the need to take the big step forward to become a high income nation. This is indeed a welcoming change that will allow all working Malaysians to progress up the income ladder and to look forward to bigger pay checks and maintain a higher standard and quality of living.

Widening the pool of high income earners is certainly good for the country to take a leapfrog forward across all the economic sectors. This is because it will promote higher domestic consumption and more sustainable growth for the country.

In the real estate sector, one of the keys to ensure sustainability in the local market is to increase the people's per capita income at least to the level of the other developed countries in Asia.

Unless we grow our per capita income, we will not be able to move up the value chain and see a phenomenal growth in our real estate sector.

The vast difference in per capita income compared with the high income countries of Singapore, Hong Kong, South Korea and Taiwan could be the reason for the big property price gap here compared with that in those countries. Likewise in the other sectors, there are also many growth opportunities to be tapped by moving up the value chain.

It does not help that the country is still dependent on so many foreign workers which is causing substantial outflow of foreign exchange to the other countries. Instead of relying on these supposedly lower wage foreign labour, it is time to revert back to our own Malaysian workforce which will have substantial spillover benefits to the local economy.

Although the pay structure will have to be revamped upwards, employing our own workers will ensure that they will be duly employed and prevent them from getting involved in other undesirable activities if they remain unemployed.

Like many high-income countries such as Singapore, Hong Kong and Taiwan, foreigners should only be allowed to work as domestic maids and high skilled and critical professional jobs that are in short supply locally.

This way, the people's wages will have a chance to move upwards and not kept artificially low like what is happening now. There will also be less outflow of funds from the country.

In the real estate sector, one of the most obvious changes is the rapid appreciation of property valuation and the sudden windfall for many property investors.

The sharp rise in property prices in some parts of the country has caused both anxiety and excitement depending on which side of the scale one is at.

Developers certainly have a big role to play in the way property prices move. The pace and size of their project launches will determine the supply coming into the market.

When there is still a strong pent-up demand for more affordably to higher priced houses like what is happening now, it will help if developers speed up on their launches and help to ease the supply flow.

The price of a property when it was first launched is an important factor, but beyond that, the rate of how much a property will appreciate or depreciate is dependent on a number of factors including demand and supply. While location is a major factor that determines a property's value, other important considerations include infastructure network, accessibility, security, and the amenities and facilities provided.

I have observed that while there are townships and neighbourhoods that continue to be relevant and look refreshing and happening, there are also many that are dreary without much going for them. Of course, the value of properties will also differ accordingly.

Developers should continue to establish strong rapport with their buyers even after the projects are handed over to buyers.

We should give the thumbs up to developers who consider the handing over of completed projects as the beginning of their relationship with their customers.

They continue to listen to their buyers, help to form active and engaging community activities and add value to the townships they build.

It is important not to undermine good after-sales service as they can work wonders for a developer's reputation and promote loyalty and repeat purchase from customers.

Deputy news editor Angie Ng hopes to see developers sprucing up parks in their townships instead of cannibalising them and deprive residents of a healthy form of recreation.

By The Star (by Angie Ng)