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Property bubble

“2020 Pandemic Adaptive” Property Market: Realistic or Just A Fascinating Dream?

The world has gone through several property market crashes in the past 50 years, none of them, though, has been “pandemic-fated” and should be compared to the current one! But, wait a moment, are we in a property market crash or bubble bursting situation?

pandemic boosting the property bubble, boom!

Property market crashes have always been, historically, driven by speculators whom, after entering the market at very favorable conditions, high demand low supply, massively left it to realize their own gains causing an overwhelming wave of “on-sale” properties, high supply low demand!

Call it “Property Market Crash 101” but in few simple words this is as simple as it is!

Bubble Bursting?

Are we, in Malaysia, even near to such a market scenario? In my humble view not at all as the Malaysian financial authority, namely Bank Negara Malaysia, has been curbing property speculation since long and we didn’t witness any massive sale off of properties for quite some time, even during this pandemic. This graphic shows, in an undeniable way, a drop of the property transactions’ volume with their values holding or showing a minimum decrease.

volume and values of property transaction in pre-pandemic era

Of course, we cannot deny it, there are some areas and type of properties where the supply has been absolutely overwhelming compared to the demand. Good examples are KLCC area where occupancy rates of residential properties have been falling for several years in a row and, Iskandar Malaysia, in the state of Johor, where property development has been running ahead of economic growth in terms of several years and thousands of “un-demanded properties”. 

The Future Scenario

All the above, unfortunately, should be looked at as history. Let us have a look at what, in my view, have been allowing, and hopefully will keep to, this unusual market behaviour? The world or the way we thought of it, for the first time since 1919, has been and is threatened by an unprecedented pandemic, Covid-19, which is radically reshaping our economies and way of living and working we all were used to.

Though the housing market has not been the trigger of this economic downturn, investors and homeowners start bracing themselves for the worst as it became clear that the pandemic would push the world economy into its deepest downturn ever.

Unexpected Bull Run

Keep on walking in uncharted territory, house prices picked up in the most middle- and high-income countries, in the rich world they rose at an annual rate of 5% and, even, some markets have started experiencing a bull run. Germany saw its house values 11% higher than the year before and the same goes for South Korea and parts of China.

Monetary Policy

Bank Negara, as most of the central banks around the world, has heavily cut policy rates reducing the cost of mortgage borrowing. Some borrowers, the ones with healthy financial background, can now afford to take out bigger mortgages; others find it easier to manage their existing loan repayments. Investors with spare cash at hand, are willing to invest more in property because yields on other assets have dropped and the share market appears to be highly unpredictable. In few words, property has raised its appeal and is sexier than before.

Fiscal Policy

In the past recessions, as people lose their jobs and their incomes fall, foreclosures heavily pushed house prices down. During the early stage of this pandemic though, many governments have enforced substantial helping policies to preserve households’ incomes. Handouts as wage subsidies and real financial support and grants to all industries have been introduced by most economies worldwide.

In Malaysia, the government and BNM have adopted measures to directly support the housing market allowing borrowers to firstly suspend their mortgage repayments for 2 quarters and then renegotiating the terms of their loans once the two quarters “payment holiday” ended in September 2020.

Changing Consumer’ Habits

In 2019 households in Malaysia and most SEA region countries, devoted 14% of their spending to housing costs. With an estimated 53% of office workers, since when the Covid-19 pandemic has started, working from home and a boosting of on-line businesses, many potential house buyers may want to spend more on a nicer place to live and the market has showed evidence that people are thinking of upgrading their dwellings.

They are looking for more space, with better soft infrastructures and not necessarily nearby the city centre. Suburban properties have been searched and are currently experiencing higher demand. This is happening not only in Malaysia and the SEA region but even in New York and San Francisco people are fleeing cities for the suburbs.

Global Trend

Data from Zillow, a housing marketplace, suggest urban and suburban property prices are rising at roughly the same pace as before pandemic while price growth in the highly-priced CBDs and city centres is actually slowing down. People are looking for bigger houses near where they already live, suburban areas, and for the ones residing in or near the city centres, the hunt for bigger living quarters has expanded towards the outskirts.

The strategic factor of this shift of preferences has been boosted by the faster digital transformation of the Malaysian developers to offer a safe digital and tech buying experience for all buyers. Plenty of “pandemic proof” solutions in this regards such as virtual or augmented reality, digital all-in-one property sales booking system, keys handing over and defect management systems or even community building and communication systems.

digital walk through of a fully digitalized all-in-one property sales booking system

In conclusion, yes I am not expecting a property market crash but few small intensity and not disturbing market adjustments with a good recovery starting already in the second-third quarter of 2021.

The Economist Intelligence Unit has clearly stated that: “It may take more than the deepest downturn since the Great Depression to actually shake the housing market’s foundations”

About the author

Dr Daniele Gambero Propenomist 1

The opinions expressed in this article are solely of the author, Dr Daniele Gambero. 

Dr Gambero has been an expatriate to Malaysia from Italy, since 1998 and has more than 35 years of real estate experience. He is the co-founder and group CEO of REI Group of Companies, the Co-founder of Propenomy.com and the deputy president of the Malaysia Proptech Association. 

In the past 10 years Daniele, as international and TEDX speaker, has engaged several hundreds thousand people talking about Property, Economy, Propenomy, Digital Marketing and Motivation. He is also a bestselling author and columnist on several magazines and main stream media.

Property Development still brick and mortar business

Property Development in the 21st Century: still advocate the “brick and mortar” business model?

It was only a few years ago, three or four, when a property developer, at a conference, clearly stated that, no matter what, property development was and still is a brick and mortar business.

Since then, plenty of innovative solutions for property development have been introduced in the market and many developers have started reviewing their “brick and mortar” style towards a more suitable and definitely sustainable digitally transformed world, the Proptech world.

Nowadays, everybody is talking about affordable housing and, for sure, digital transformation in property development is bringing a highly disruptive but positive impact in the property industry. The great thing is, properties shall cost less and consequently become more affordable! The how is not too complicated.

Below, I’m just giving a few examples of positive impact on property development from a costing point of view.

Proptech Positive Impact on Property Development

1) Pre-construction

Using big data and Ai is nowadays possible to understand clearly what the public is demanding in a certain area, what purchasing power do they have and which type of property they are looking for.

Valuers and professionals are preparing quite accurate feasibility studies using all the information as above and everything is there to give a clear direction to future property development.

2) During construction

We all have heard about BIM (Building information Modelling) which, though a precise integration of architect drawings with C&S (Civil and Structural) and M&E (mechanical and electrical) data allows to find and resolve beforehand all possible construction issues.

In this way the construction period will be shorter, easier and definitely less expensive.

IBS (Industrialized Building Systems) has been also widely adopted in property development. Its impact has reduced construction times and allowed better quality. Again, we talk about cost reductions.

3) After construction

Property defect animated picture from property development

Delivery of Vacant Possession, resolving construction defects and building communities have been mostly digitalized, as an example have a look at what ProFix can offer to both property developers and purchasers, and the outcome is once more cost efficiency and better relationships between all players.

4) Sales and Marketing

The day in which we will no longer need to visit a sales gallery of property development to discuss with an agent and to visit the show units is almost here! Nowadays, above all with the impact of Covid-19 pandemic and the forced social distancing, many developers have already adopted digital tools such as:

  • AR (Augmented Reality) and VR (Virtual Reality) to allow the public to visit their sales gallery and “virtually walk through” the proposed property.
  • Once the decision is made, on-line booking kicks in and,
  • in a few minutes since when the transaction has been completed, bankers have already received the loan application (pending documents),
  • the appointed lawyer is already preparing the Sale and Purchase Agreement and the sales staff can already see the new booking appearing on their digital sale charts.

You can see good examples of all the above visiting the few links below: for the Virtual Reality, for the virtual booking / sales admin and finally for the legal part. Another good example of how fast digital transformation is changing the property industry can be found in the website of the Malaysia Proptech Association.

malaysia proptech vertical 2020

ProSales has been at the frontline of real estate disruption since several years and helped developers in serving their purchasers in a seamless way. Are you ready for a future which is already happening in ours present?

Leave your comment below as we, at ProSales, would love to hear from you!

Stay safe and see you soon!

About the author

Dr Daniele Gambero Propenomist

The opinions expressed in this article are solely of the author, Dr Daniele Gambero. 

Dr Gambero has been an expatriate to Malaysia from Italy, since 1998 and has more than 35 years of real estate experience. He is the co-founder and group CEO of REI Group of Companies, the Co-founder of Propenomy.com and the deputy president of the Malaysia Proptech Association. 

In the past 10 years Daniele, as international and TEDX speaker, has engaged several hundreds thousand people talking about Property, Economy, Propenomy, Digital Marketing and Motivation. He is also a bestselling author and columnist on several magazines and main stream media.


What is Artificial Intelligence (AI)?

What is Artificial Intelligence (AI)?

The Artificial Intelligence (Al) techniques have become broader application. Many ideas invented by AI researchers have been assimilated into computer science generally for applications in expert systems, natural language processing, human-machine interaction, information retrieval, graphics and image processing, data mining, and robotics . The agents theme serves to unify what might otherwise seem to be a collection of disparate topics.

Everything you need to know about Artificial Intelligence

At a very high level artificial intelligence can be split into two broad types: narrow AI and general AI.

Narrow AI is what we see all around us in computers today: intelligent systems that have been taught or learned how to carry out specific tasks without being explicitly programmed how to do so. This type of machine intelligence is evident in the speech and language recognition of the Siri virtual assistant on the Apple iPhone, in the vision-recognition systems on self-driving cars, in the recommendation engines that suggest products you might like based on what you bought in the past. Unlike humans, these systems can only learn or be taught how to do specific tasks, which is why they are called narrow AI.

Artificial general intelligence is very different, and is the type of adaptable intellect found in humans, a flexible form of intelligence capable of leaning how to carry out vastly different tasks, anything from haircutting to building spreadsheets, or to reason about a wide variety of topics based on its accumulated experience.


Artificial Intelligence(AI) will transform these Industries:

  • Education industry

Now, AI-powered appointment scheduling software exists so that teachers and parents can make time to meet with best for both parties, so that never result rushed five-minute conversation with little information shared. Classroom can implement small tartile robots for student to interact when study. These AI-fueled bots help students with reading, language learning, and social interactions.

  • Healthcare

AI in healthcare is vast and the technology has been transforming the industry by providing better healthcare solutions. The combination of AI and the Internet of Medical Things (IoMT) are making healthcare professionals more efficient. The technology is useful in early detection, diagnosis, research, and training. Applications powered by AI technologies are helping people with proactive management of a healthy lifestyle.

  • Small business

Even though small businesses have fewer contacts than large companies, a small business might only have few data analysts who have to contend with over 500 or more than that customers’ information: account history, demographics, restrictions, and more. To streamline this process, machine learning software can be used to take pressure off of data analysts. 

  • Construction

Artificial Intelligence(AI) is the new helping hand for the construction industry. Advanced forms of technologies are being used in the industry and making our much simpler. AI is useful in gathering data and processing and predicting based on the information. The technology is useful in planning stages, construction underway and post completion of the project.

  • Real estate industry  

In particular, AI Chatbots as powerful tool for lead generation by automating the initial contact between buyers and sellers. The connection saves time and resources while enable answer to inquiry efficiently. It provides solutions and most importantly, it is a synonym for great customer experience in an instant and trendy manner.

Searching for PropTech solutions? ProSales, our highly performing mobile app digitize from the point of sales prospecting to handing over of Vacant Possession, then Defect Management, we strive to improve efficiency and increase company’s saving. Contact us today for a Free Demo