New era for property investing?

Has property investment reached an inflection point when the traditional way of investing no longer works? A forum comprising some of the industry’s most enlightened experts give their views.

“Even experienced investors do not know how to invest now.” Agnes Wong

“The pandemic is a time when businesses need to change their mindset in order to adapt and survive the new realities.”
“Pivoting online is practically a must in order to thrive when the recovery comes.”
“Decentralisation and the sourcing of talents worldwide will be the new norm as the gig workforce do not want to be tied down.”
“Before the recovery comes, we must do the marketing now.”
“We must start having a global mindset.”
The above are just some of the conclusions from the vast number of topics covered during two very intense roundtable discussions on the impact of Budget 2021 on SMEs and the property market recently.
Organised by Syarikat Ong Group, this is the second year the Annual Tax Symposium was held, and it attracted a sizable number of attendees. Emceed by a very lively Agnes Wong, the Managing Partner of Syarikat Ong Group, the strong lineup of panelists responded with many interesting ideas and examples.
The panellists comprised Dato’ Sri Idris Jala, Chairman & President of PEMANDU Associates Sdn Bhd; Datuk Michael Kang, President of SME Association of Malaysia; Datuk Koe Peng Kang, President of FIABCI Malaysia; Lim Boon Ping, President of MIEA; Elizabeth Siew, President of Malaysia Proptech Association; Chris Tan, Managing Partner of Chur Associates and Vincent Fong, Founder of MM2H Club Hong Kong.
In terms of property, the impact of Budget 2021 was rather disappointing. Apart from a handful of new incentives such as stamp duty exemption, it did not fulfil many of the wishlists given by the industry. Hence, a strong rebound in the property market is not expected.
An example is the lack of direction of Malaysia My 2nd Home (MM2H) programme which is deemed by the industry as crucial to bringing back foreigners to the country. These foreigners are the ones expected to pick up the slack in the high end property market as local demand for these properties is not sufficient.
According to Datuk Koe Peng Kang, President of FIABCI Malaysia, Malaysia urgently needs Foreign Direct Investments (FDI) as its national debt has reached 85% of Gross Domestic Product (GDP). “How much more can the government continue to pump in money to the industry especially in the case of SMEs and property,” he asked.
He further explained that the property market is always dependent on two things:
1. FDI
2. Local population
Malaysia’s population of 31-32 million is not enough to sustain the market so some big boys had to venture overseas to do projects in the UK (London), Australia, China and Japan. Hence, the need to bring in more FDIs and foreigners.

Koe proposed that the government collaborate with private organisations to go on a promotion drive to attract well-heeled foreigners to come to Malaysia for retirement or their children’s education, in addition to investing in the country. He cited the example of London where properties are mainly owned by foreigners and not locals; similarly with Melbourne.
“Malaysia has similar advantages like good quality education (except for some colleges) and should make a serious attempt to woo foreign businesses to come in now. If we don’t do it now, by the time we recover, it would be too late. We would have missed the boat [foreign money would have gone to other countries by then],” Koe said.
Dato’ Sri Idris Jala, Chairman & President o
f PEMANDU Associates Sdn Bhd concurred, saying a vibrant property market will be good for Malaysia “if that’s what Malaysia wants”.

Online/Offline Hybrid

In the case of shopping malls, most panelists agree that some form of hybrid online/ offline presence is needed. There is no question however that malls will still remain relevant due to the propensity of Malaysian families to go there not just for shopping but for entertainment and dining.
“The only way for malls to survive is to find better ways to continue to attract families to visit,” said Idris Jala, who is also the chairman of Sunway Real Estate Investment Trust (REIT).
Idris Jala also suggested that sellers of property use virtual reality to sell so that potential buyers can see “everything” and do not need to physically visit the showroom. “In future, brick and mortar will be transformed to the digital form,” he predicted.

When it comes to loan accessibility, FIABCI’s Koe advised banks to take a more flexible approach, for e
xample, if a borrower works in a booming industry now such as medical supply, but can’t come up with the deposit, banks could help out by giving a higher loan margin.
Or if the area is near an airport, it does not mean the properties there are at higher risk because that area is also near hospitals where medical personnel have secure jobs. “Banks and valuers need to balance the risk perspective,” he concluded.
Annual Tax Symposium
Organized by Agnes Wong, Managing Partner of Syarikat Ong Group
Roundtable discussion on Budget Impact on SMEs
Panellists: Dato’ Sri Idris Jala, Chairman & President, PEMANDU Associates Sdn bhd, Datuk Michael Kang, President, SME Association of Malaysia and Datuk Koe Peng Kang, President, FIABCI Malaysia
Budget Impact on Property Sector
Panellists: Lim Boon Ping, President, MIEA, Elizabeth Siew, President, Malaysia Proptech Association, Chris Tan, Managing Partner of Chur Associates, Vincent Fong, Founder, MM2H Club Hong Kong

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