Increase in redundancy will impact property industry

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By Joseph Wong josephwong@thestar.com.my

(From left) Star Media Group business editor Jagdev Singh, Syarikat Ong managing partner Agnes Wong, Soh, Yau and Tan answering questions at the forum.

(From left) Star Media Group business editor Jagdev Singh, Syarikat Ong managing partner Agnes Wong, Soh, Yau and Tan answering questions at the forum.

KUALA LUMPUR: The government’s push for digitisation with Budget 2020, on one hand, will accelerate Malaysia’s growth and per-capita incomes but on the other, will inadvertently increase the unemployment rate.

This will have a negative impact on the property industry as more homes will come under the auction block when retrenched homeowners find themselves in financial distress.

The number of properties entering the auction market as a result of default payments is already expected to increase in the second half of this year, according to a valuer.

The volume of auctioned properties in 2017 was 29,282 units valued at RM12.91bil for the entire country, he said. This rose by 20% to 35,243 in 2018 while value rose to RM16.24bil, a rise of 25.79%. As of April this year, the number of properties being auctioned totalled 18,253 units, valued at RM9.35bil, with 90% of the properties are residential units.

The affected group are likely those 40 years of age and above who are unable to adapt to new technological advances, said BT & Associates partner Bernard Tan.

“Digitisation will mean orderly systems, order and inventory systems, and so on, that owners can control better,” he told StarBiz after the ‘Moving into 2020 with Budget 2020’ forum session on small and medium enterprises (SMEs).

The forum covered the essential components pertaining to SMEs, property buyers and investors and businesses. The one-day event, organised by Syarikat Ong and co-organised by StarProperty and KPMG, was recently held at the Cybertorium in Menara Star.

While there is cost involved in digitisation, Budget 2020 does allow for incentives towards this but the outcome is supposed to lead to greater efficiencies and ultimately a reduction of employees, said Tan.

This will result in a higher employment rate because there will be a group of employees who will unfortunately become redundant, he said. This group is likely the 40 years and above age group who are unable to adapt to the technological change, he said.

On a brighter note, Malaysian Entreprenuers’ Development Association treasurer Jack Yau said big data will play an important role in this new age, even for the service industry.

KPMG executive director David Soh agreed, pointing out that the big corporations and government authorities were already utilising big data. “It’s something you can’t run away from,” he said.

The takeaway from the SME session of the forum is that enterprises have to allow for innovative ideas when they take in fresh graduates as this will pave the way forward for the businesses.

This will lessen the impact of the projected increase in redundancy as allowing more fresh graduates to enter the workforce will bring in a new set of buyers when they stabilise their finances.

Want to contribute articles to StarProperty.my? Email: editor@starproperty.my
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