The arrival of the pandemic has disrupted industries both globally and nationwide. Much like its peers, the property industry was left to face an unprecedented number of shifts and along with the shifts, came the impact as well.
In a conversation with BusinessToday early April just weeks after the Movement Control Order (MCO) was implemented, IDEAS senior fellow, Carmelo Ferlito said the property market will be under stress from different perspectives, with investments being on hold for both commercial and residential properties.
While its been a gloomy year for the market, Vincent Lim of CozyHomes is holding out with optimism. CozyHomes is a property platform that lists a collection of comfortable and beautifully designed living spaces for rent with immediate availability.
However, with a majority of customers that are international expats and students along with the closure of borders, the platforms have had to make some shifts in their direction to survive the ordeal brought on by the pandemic.
Lim who is the founder of website told BusinessToday that the shift now involves tenancy management with a minimal charge upfront and subsequent charges on takes place on a per request basis.
“Our clientele usually is made up of 50% expats and with the country borders now closed, we had to make due and adapt to the changes taking place,” he says.
CozyHomes now manages the property listed on their platform on behalf of the tenants making it easier for tenants who have property in the Klang Valley but are unable to look after them due to other commitments.
The platform is also offering virtual tours of properties to potential tenants due to the pandemic as physical tours of the property could prove to be difficult due to fears of social interaction. CozyHomes are not the only ones implementing virtual tours, property developers such as Mah Sing have also implemented similar features online to showcase their properties to potential buyers through screens.
CozyHomes will also be introducing an annual subscription rate. The subscription fee itself covers the fundamental things like help to collect rental from the tenant monthly and also to look out for tenants if there is vacancy.
“Tenants will have access to our ala carte menu, pay per request, for example, if there is a leakage issue at the unit, the tenant just has to file a complaint, we will deploy our team to inspect and rectify but of course at a small cost. Another example would be wanting us to monitor their utility bills where we also charge a small annual fee,” Lim said.
Change in demand
Lim however points out that demand for rental properties have also shifted to the suburbs of the Valley, resulting in a drop by 25 percent in the area around KLCC. He says the shift was a result of the pandemic that had led to the implementation of the work-from-home trends nationwide as well.
“The market is set to be gloomy for the next 18 months however we do see some shift in demography towards the locals as average rental rates among our properties declined.”
According to iProperty.com.my H1 2020 Portal Demand Analytics, three housing types, terrace house, condominium and service residency saw drops in demand in 4 cities, Selangor, Kuala Lumpur, Penang and Johor.
While visits and listings for terrace homes grew in H1, the listings growth outpaced the visit growth, resulting in a -3.3 percent decline in demand.
Lim also mentioned that the increasing property overhang is also impacting players like himself which has lead to tenants decreasing their rental prices. “The practices in the market is not in favor for players like ourselves,” he says.
Lim urges for development in the country and the Valley to slow down so the existing supply could be filled up. Property overhang in Malaysia has been posing a serious issue particularly in states such as Johor as supply has surpassed demand.
And while the Rent To Own scheme was designed to help the rental market, Lim says there are no clear guidelines and there needs to be more tax incentives for owners and developers for the particular market as well.
He goes on to further shed some light on the Residential Tenancy Act which is need for some amendments to the policies as property owners are now hesitant to rent out due to confusions.
“For instance, when a tenant does not pay their rental on time or for an extended period, cutting access to utilities is not much of an option as any unforeseen consequences could prove to be detrimental to owners,” Lim tells BusinessToday.
“Developers are too segmented these days and needs to be more holistic. They need to provide homes instead of houses,” Lim says, referring to the need to change layouts and designs of property built to acclimate with changing times.
With the pandemic set to stay on for some time, companies are offering work-from-home options for employees on a more permanent basis. This is evident as employees in several industries have been working from home since the start of the MCO.
This, Lim says needs to be taken into account by property developers. “A home office should be taken into consideration as an important part of our lives for the coming years. This year has proven how much we need a space dedicated for work in our houses.”
“Developers need to look at more innovative offers rather that would work for the long-term,” Lim says.
“While this year has not proved to be what we wanted it to be, we are still positive for the upcoming year,” Lim says of 2021.
“We will be leveraging on technology and to transfer all offline process to online by the end of next year and hope to make the platform transactional as well,” he tells BusinessToday.
CozyHomes was also among the top five startups who made it through to the Sunway iLabs Super Accelerator programme. As part of the programme, each startup will receive up to RM100,000 of funding, pilot project, mentorship and access to Sunway’s ecosystem and network.
“Sunway iLabs is, in a way, an investor of the CozyHomes as they have bought a small % of the company’s equity. They are constantly supporting us as and when needed in terms of providing resources. To top it off, we have weekly meetings with them where I share my plans, strategies and even shortcomings while in return, they provide advice, feedback and assistance where necessary.”