CASE STUDY - ANSWER ALL QUESTIONS PETALING JAYA (Jan 27): The Malaysian property market will show stronger signs of recovery in 2022 as the Covid-19 pandemic appears to have been brought under control with the achievement of a vaccination rate of more than 79% and the reduction in serious infection cases, according to Henry Butcher Real Estate Sdn Bhd chief operating officer Tang Chee Meng. In presenting its annual report on the review and outlook for the Malaysian property market in 2022 released on Jan 27, he stated that almost all sectors of the economy have been opened up and people have adjusted to the new normal of adhering to the SOPs. In the residential segment, the report stated that the Home Ownership Campaign (HOC) had 'concluded its 'run at end-2021 and there has been no indication so far that it will be extended by the government. This may reduce buying interest, especially in early 2022 as developers rejig their marketing sales packages to find the right mix to attract buyers. "The adoption of proptesh applications and digital marketing programmes will help developers gain a better understanding of their purchasers' needs and develop a closer rapport with them as well as reach out to overseas buyers. Also, the new Malaysia My Second Home (MM2H) rules, with its raised income thresholds and fixed deposit placement amounts may deter new applicants and reduce foreign interest in local properties." The report stated that the primary market is faring better than the secondary market due to the incentives provided by developers and government under the HOC, but this may change considering that the HOC has ended. Some banks are also refocusing on the secondary market because homebuyers are perceived to be financially more well off and less likely to default. "Developers have to accept lower profit margins, as building material costs have risen and market conditions are not conducive to selling prices being increased to offset the higher costs. The current low interest rate environment has encouraged house-buying activities, but there is a possibility of interest rate hikes in 2022," it said. House desigyes will also evolve to address issues arising from the pandemic. "This includes better planned and equipped study area to make work from home more comfortable, providing more electrical power points and improved internet connectivity including the common areas, adopting various types of touch-less technology, having dedicated lockers/rooms for temporary storage of parcels and charging stations/points for electric vehicles," it said. The Malaysian economy will expand between 5.5% and 6.5% this year, underpinned by continued expansion in global demand and higher private sector expenditure, said governor Tan Sri Nor Shamsiah Mohd Yunus. The central bank will announce its 2022 growth forecast in March. She noted that Malaysia is well positioned to gain as global growth and trade bounce back as observed in 2021. Meanwhile, Nor Shamsiah said headline inflation is likely to remain moderate in 2022 as the base effect from fuel inflation dissipates, while core inflation is expected to be modest with upward pressure contained by continued slack in the economy and labour market. Overall, the inflation outlook continues to be subject to global commodity price developments and risks from prolonged supply-related disruptions, she added. In a statement, Mah Sing said the impact of the pandemic has had an influence on the property market in Malaysia over the last two years. "This has resulted in a change in consumer patterns and new challenges for property players. The group (Mah Sing) foresees that the pace of revival can quicken, provided global and domestic economic growth is stable, the company said. "Ultimately, the property market looks to be experiencing a revival as we move into 2022. We will continue to ensure that our products are aligned with market sentiment and meet the pent-up demand for affordable housing, Mah Sing said. The group said it intends to continue leveraging the strengths of its existing digital-market platforms to boost sales by streamlining processes from awareness to payments. Mah Sing Group Bhd is set to launch M Serxum in Bandar Baru Salak Tinggi, Sepang, next month. Registration of interest started in August and the project has secured more than 5,500 registrants to date. The significant increase in footfall to its sales galleries since their reopening indicates keen interest in Mah Sing's properties. Ong says the demand for open green spaces has also increased during the Covid-19 pandemic, as people are more concerned about their health and well-being. As such, the green areas and facilities provided in M Senyum will allow future residents to enjoy outdoor activities and spend time with their families. QUESTION 1 Based on the facts from the case above and your knowledge explain any FOUR (4) external factors that have impact on the property developers such as Mah Sing. In your answer explain how each of the factor is an opportunity or threat. (18 marks) QUESTION 2 As a property developer, discuss and justify any THREE (3) important drivers to achieve business success and sustainability. (12 marks)