16th June 2020
Starts from COVID-19 strikes, the impact towards the economy is critical in the country and globally as well. The impact and side effects of COVID 19 pandemic on the property market dramatically. At most of the industry became “freeze” during the pandemic as only essential sectors economic activities can operate under movement controlled order. Others should remain prohibited until further announcement from the government.
Samuel Tan, the director of KGV International Property Consultants (M) Sdn Bhd mentioned that the full impact from COVID-19 Pandemic and Movement Control Order (MCO) would fall under 6 to 12 months in the following period. Tan foresee there will be more cases of a household owner willing to sell their property with lower prices. People with lower or medium-low cost aspect of buying a house would be benefits. These are one of the significant effects on the property market by COVID 19 pandemic.
Besides that, Tan also mentioned that there will be many buyers are willing to give up the 10% deposit had paid for their property before the MCO period. Due to the reason that the price values would possibly be dropped in soon future.
Short-Term vs Long-Term Effects of COVID-19
Covid-19 tends to worsen the market. As most of the people are far away from buying luxury items during this intense period. As mentioned above, most of the economic activities are listed to be prohibited during MCO.
Moreover, due to all of the uncertainties in the period of the business shut down and stopped, lack of confidence towards short future, and the unpredictable factors coupled with the following next six to twelve months business survival period. All of the potential buyers would rather stay and wait for a look than the decision on buying. Resulted in being having drop situation of average sales in the first half of the year 2020.
Despite the short-term effects of the outbreak is immediately showing the impact of the drop in average sales statistically. While long-term would be more intense. As this outbreak changed citizens lifestyle that transforming how people live and work. Therefore, it changed the associated real estate requirements.
For instance, during this outbreak period, everyone is prohibited having a meal as dine-in. It is to ensure lesser human contact, spreading the virus and infecting others.
Other than that, the office-based business foreseen to downsize, due to the emergence of flexible during this MCO period. Therefore the office-based working environment is transforming into a remote work environment.
Besides that, retail segments had bigger impact especially shopping malls would be a decreasing amount accordingly. Due to changed consumer lifestyle. In oppose, e-commerce will arise as it provides seamless and responsive services towards consumers. By offering them to buy and sell the desired product and services 24/7. Which having lesser direct physical contact and it will bring a trend in the future.