PETALING JAYA: His residential unit is located on the lower levels of the block near KL Sentral. Due to the hubbub, he could not find a long-term tenant. But when it was listed on Airbnb, it became a hit thanks to its strategic location.

The arrival of Airbnb in Malay­sia and its boom has brought new income for property owners and agents, who encourage clients to consider renting out their units on a short-term basis, instead of letting them stay idle.

Some developers are even known to construct smaller units to cater to this segment made popular by the online platform offering accommodation options to visitors and tourists.

A property agent, who wished to be known only as Chan, said those units were supposed to be re-sold or rented out to long-term occupants.

“With the slow market, agents have been quick to adapt. They help homeowners manage their units on Airbnb and earn money.

“Not only that, the move eases the problem of finding long-term tenants,” she said.

Another property agent, Lee, said he started helping owners manage their residential units on Airbnb about two years ago.

He now earns a management fee of RM300 to RM500 per month as a side income.

“My tasks include putting the keys into mailboxes, communicating with the Airbnb guests and hiring cleaners.

“This is a good way for owners to get some in­­come to cover their instalments,” Lee said.

“The returns could be higher than getting long-term tenants.”

An industry observer said more development projects in the Klang Valley are specially designed for short-term rental.

“The developers are trying to market and package their pro­ducts in such a way. They encou­rage potential buyers to put their units on Airbnb and other similar platforms. This has become their selling point,” he said.

These projects are usually conveniently located in city centre or near LRT or MRT stations.

“The units are smaller, about 400 to 500sq ft, and are partially or fully furnished. Some units are equipped with kitchen and some developers tell po­tential buyers they can get better returns if they become Airbnb hosts,” he said.

While owners are happy with the money-making venture, their neighbours, who often have to con­­tend with the noise and strangers, are naturally not.

National House Buyers Asso­cia­tion secretary-general Chang Kim Loong said its committee is still studying the pros and cons of legalising Airbnb.

It was reported last month that Airbnb was in talks with Malay­sian authorities to devise a possible regulatory framework for its services after Kuala Lumpur City Hall ordered owners or operators of residential properties under platforms like Airbnb to register the operations or face penalties.

It said short-term rentals through websites such as Airbnb, HomeAway and iBilik may bring safety and cleanliness problems to the surroundings.

Penang Island City Council He­­ri­­tage Buildings Technical Review Panel member Ng Wei Aik said under its by-laws, Airbnb is considered illegal lodging houses.

And the 5 issues to look out for in the future

The Counselors of Real Estate, an advisory organization that monitors real estate, released its latest report detailing the top 10 issues affecting the real estate industry. This year, the organization divided its annual list to focus on five issues currently impacting the industry and five issues to watch for potential long-term impact over the next three to seven years.

While speaking at the National Association of Real Estate Editors spring conference today, CRE Chair Joseph Nahas discussed the organization’s list and the issues it is raising red flags on.

Leading the list of current issues to watch is interest rates and the economy. While interest rates continue to climb, both the commercial and residential real estate markets are feeling changes.

Nahas explained that the issues the real estate industry will see in the future are beginning to happen today. Leading the list of long-term issues impacting real estate is infrastructure – and what the organization says is a lack of effort by the U.S. to address deterioration.

These are the five issues impacting real estate right now:

1. Rising rates and the economy

As we saw today, the Fed raised rates for the second time this year. CRE’s report said that increasing rates exacerbate the affordability crisis and has stakeholders concerned about a potential recession in 2019-2020, which would impact jobs. 

“Rising rates can actually be good – and bad – for the economy,” Nahas told the audience. “They’re bad when they increase costs. They’re good when they monitor business activity and keep inflation in check. The thinking in today’s environment by the Fed is the latter, he said “It may be painful in the short run. We may have a slower number of new home purchases or resales, or higher mortgage rates but inflation won’t get out of control.”

2. Politics and political uncertainty

Nahas explained to attendees that the mid-term elections could change the balance of power and with it, policy. “The 2018 elections are going to be telling because they’re going to determine whether or not the policies of the current administration are going to be maintained,” he said.

3. Housing affordability

The group pointed to wage stagnation, gentrification and a low supply of affordable homes and apartments, plus two decades of housing underproduction that has dramatically impacted the residential housing market. “The local control of housing decisions is problematic,” Nahas told the audience. “Decision makers … are beholden to voters and not to the economics of the housing market and as a result, they don’t respond to what is necessary from the perspective of housing that would be affordable and demanded by families, etc.”

Nahas told the audience that the solution is quite simple. “It’s a supply and demand problem,” he said. “If we can increase the supply of housing, we can lower the pricing.” The problem, he added, is convincing local officials to expand density. 

4. Generational change and demographics

The organization advised that for the first time in more than 50 years, there are four groups influencing both commercial and residential real estate: Millennials, Baby Boomers, Gen X and Gen Y.

On the rising tide of Millennial homeownership, Nahas said “We have more people today under 40 influencing real estate. That affect has not been fully felt yet. It’s going to take some time. It’s going to happen faster, because everything in this era happens faster.”

5. E-commerce and logistics

Technology is continuing to disrupt, and how we are buying things change, Nahas observed. The group said that there is concern of retail sector volatility, including the rise of e-commerce and logistics that support warehousing and delivery of goods.

And here are the 5 issues to look out for in the future:

1. Infrastructure

The group called out the United States’ recent D+ infrastructure rating from the American Society of Civil Engineers, stating that there is a “lack of serious effort” by the U.S. to address its failing infrastructure. New residential housing developments require new infrastructure, such as water, power and sewer services. The group also stressed that an absence of developed public transit hampers development, creates congestion and ultimately increases costs.

2. Disruptive technology

Nahas said this could be considered a current issue but “we’ve debated and determined that tech is moving so quickly that it’s an evolution,” he said. The organization’s report notes that the impact on residential areas include an increased demand for connectivity, smart homes, and can cause older structures to be less desirable. Nahas told attendees the tech wild card is blockchain, which he said has potential to disrupt real estate in a significant way, in different areas from transactions to titles.

3. Natural disasters and climate change

Despite all the data and press coverage, natural disasters are unpredictable and this plays havoc on homeowners and developer and increases risk to homes, both single-family and multifamily, the organization said.

4. Immigration

Immigration affects the skilled and unskilled labor pool, Nahas said. Additionally, immigration impacts both residential and commercial real estate and affects both urban and suburban areas, Nahas pointed out. Residentially, changes in immigration policy mean fewer new households, reduced rental/owner demand, reduced broker transactions, the organization said in its report.

“Policy as we know, is contentious,” Nahas said, adding that it’s an issue to be thought about today but will have larger implications in the next 3 to 5 years.

5. Energy and water

“Owners and developers and investors must consider what the state of energy and water is when building,” Nahas said. Residential real estate is impacted as the cost to extend utilities at the edge of urban areas increases, he said.

“On the heels of that, we have regulatory and environmental actions, which are unpredictable that impact, and therefore, projects that are being considered must be looked at relative to this implication.

The group also released a watch list of areas to keep an eye on, too. These include construction costs, tax cuts, urbanization/suburbanization and societal leadership and activism.

Placemaking is based on a simple principle: if you plan cities for cars and traffic, you will get cars and traffic. If you plan for people and places, you will get people and places:  Southeast Asia, not the least Bangkok, is playing catch-up.

In a recent report, CBRE says sluggish retail sales and flat rental growth are contributing factors. Elsewhere, e-commerce—although in its infancy—is drawing millennial shoppers online. Coupled with the fact that consumers in Thailand have become more sophisticated and demanding, the traditional “bricks and mortar” shopping malls will remain stretched.

These factors have made ‘Placemaking’—like ‘Retailtainment’—a frequently-discussed topic and hot trend in the retail industry in Thailand, despite floating definitions.

Placemaking is about creating an environment that people choose or prefer to visit, and return to by incorporating and integrating several potential elements into a mall.

Thai retailers have been taking notice. So have developers, with a focus on placemaking now a genuine retail trend.

Placemaking is based on a simple principle: if you plan cities for cars and traffic, you will get cars and traffic. If you plan for people and places, you will get people and places. More traffic and greater road capacity are not the inevitable results of growth. They are products of very deliberate choices made to shape our communities to accommodate the private automobile.

One of the key elements of placemaking is the scale—the bigger, the better! Some smaller malls are declining simply because they cannot offer diversity and variety. We are now witnessing the trend of making a place a ‘destination’.

For example, Em District in Bangkok combines three shopping malls: Emporium, EmQuartier and the upcoming EmSphere. The concept is being undertaken by the same developer, using different concepts which complement one another. For convenience, all three locations are linked by a skywalk.

“Placemaking is something that makes a development quite unique and gives people reasons to go there that is different to what they can find elsewhere. It is making somewhere a recognizable landmark so that people want to live and stay there.”

The last key element happening in retail centers in Thailand is innovation and technology. Thailand’s first smart car parking system at EmQuartier is one example.

A leading coffee chain also implemented the “E-Wallet” mobile application where customers pay for their orders and collect points. The brand uses it to inform customers about new products and promotions. Many restaurants are now using tablets as a menu instead of traditional paper ones. Moreover, hi-tech IMAX theaters, digital-integrated lounges, and online booking are available for the convenience of movie lovers.

Another example is Gaysorn Group, who is combining three retail centers: Gaysorn, Gaysorn 2, and Amarin Plaza. These are to be linked by pedestrian bridges and named Gaysorn Village. Completion is expected around 2020.

Other elements which are being emphasized are experience, entertainment and excitement. New concept tenants such as Bounce Inc., an indoor trampoline park. are embracing this idea.

B2S, a local bookstore chain, has opened its first “Think Space” concept at Central EastVille with a total area of 30,000 sq. ft. as a place for new ideas, inspiration and networking.

For all its leadership moments in terms of live-work-play and multi-use developments, Bangkok still lacks the nuance of placemaking initiatives in other parts of the world, which often take into account concerns such as the number of social housing units. “In Bangkok, zoning and planning is still very broad-brush and is not micromanaged. So we’re very much driven by broad-brush approaches as to what can be built in terms of use.”

In the last decade the Generation Y (those born between 1980 and 2000) or the millennial generation, has become market dominant force with young earners who have fresh buying capacity including in the real estate market. Unlike their predecessors (Generation X), Millennials have very different tastes and lifestyle choices, which mean that they are setting new trends in home buying compared people of other generations.

In this article we will discuss the top 4 things that Millennials look for in household property.

1. Efficient, green and healthy technology

We live in an age of technology where almost everyone has a mobile device and going wireless has become the norm. Today’s buyers want their homes to be technologically fitted, with wifi capabilities and a fast internet connection. But that is not all, millennials are also adopting a more sustainable and healthy lifestyle and will thus be looking for homes with energy efficient systems, good waste management and use of recyclable materials to reduce their carbon footprint. Property development with a green footprint will certainly be a popular draw with this group of people.

2. Low Maintenance

Most millennials nowadays tend to work for long hours and are extremely money conscious, which is why they prefer homes that require little maintenance. Having low-upkeep features and fittings such as floors made of faux wood and granite countertops in the kitchen are looked upon as positives by millennials. Today’s millennials do not want to spend their spare time doing household chores; they would rather go on a nature hike.

3. Good location

Location has always been important in the real estate industry, and for most millennials the preferred location for a home is close to an urban centre where they may have easy access to services and amenities such as shopping, clinics, hospitals, public transportation, and movie theatres. Office goers may not want to travel long distances for work or for leisure. However, millennials with children may prefer someplace more open and residential.

4. Open and multifunctional interiors

During the time of Generation X, every house had spare rooms and every room was given its own key role; the dining room was for eating, the drawing room was for relaxing and entertaining guests and the kitchen was for cooking food. For the most part these rooms had their own boundaries and each room had only one function. However, millennials do not think the same way; they are looking for a home with open spaces where a dining room can also easily transition to a drawing room or kitchen. In smaller homes and condos, multifunctional spaces take on an even greater importance. Nowadays it is not uncommon to find exercise equipment or an office desk in a bedroom.

We should state that these points may not hold true for all millennial home buyers; rather think of this article as a guideline for what most millennials want from the property they looking at and what influences their decisions on whether they should invest in a property or not. Millennials will be the driving force for the real estate market in the future, so making yourself familiar with what they want now will work to the advantage of any serious real estate investor in the future.

Experts believe the axing of the Kuala Lumpur-Singapore High Speed Rail (HSR) is likely to have a marginal effect on Malaysia’s real estate market, reported The Edge.

“I think some of the HSR’s hype (of bringing added value to locations along the alignment) was misplaced and might have been over-optimistic,” said Savills Malaysia Executive Chairman Datuk Christopher Boyd.

One reason is that there are already many good cross-border transport links between the two countries such as railways and air transportation. Moreover, the high expectations did not exactly result in large-scale investments within the vicinity of the HSR’s proposed stations likely due to its redundancy with existing transportation systems.

“Studies overseas have shown that in many cases, the benefits that HSR links are able to bring are often overestimated. Stations along the alignment can actually pull value away rather than bring value in.”

“It would have been a nice and convenient thing to have but it is not an essential or must-have thing to have now. It will come in time when the market is really ready for it. So (the scrapping of the HSR) is not a catastrophe or severe loss for either Malaysia or Singapore. I don’t think that is going to be a very big impact on land value,” he noted.

In agreement is Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) President Foo Gee Jen.

“Not many people are buying big tracts of land around the station locations. The investments are more small scale. The losses would be more in terms of time and planning. There was not much speculative buying around where the stations are supposed to come up.”

However, he expects the scrapping of the project to impact growth corridors like Melaka-Seremban and Muar-Batu Pahat, particularly the Negeri Sembilan’s Malaysia Vision Valley.

While the termination of the HSR could weaken investor confidence given the loss of potential spillover benefits, the government may reconsider the large-scale project when Malaysia’s debt is reduced from RM1 trillion.

“It is prudent to call off the HSR and other mega projects that can be revived when the government is in a stronger financial position.”

However, plans for major developments and infrastructure along the HSR are likely to be cancelled or put on hold.

“And for those who have paid high prices for the properties that had been planned along the alignment, they may suffer a setback. The properties in those areas are expected to lose their premium and the prices will be realigned to the level of the vicinity, but the drop of prices is not expected to be significant as our property market is still holding up,” he added.