The February 2 elections passed with a sigh of relief that there was no major violence or loss. But it did set a record for the lowest voter turnout. No single candidate received the most votes and there were a lot of spoiled ballots.
But the worst is not yet over and nobody knows how long this political entanglement will last.
Undoubtedly, these circumstances put every business on hold after the first stroke hit them late last year. The real-estate industry is no exception. In fact, it is already susceptible to the economic conditions.
Since December, home-builders’ unit sales have vanished in a wink. Until now, in this climate of uncertainty, consumers will not incur major debt and would rather not spend their money, plan or proceed with building a new home.
No matter whose side they are on in the current political polarisation, their focus is on political developments. Undeniably, the unpleasant outcome is no new sales are coming along.
However, companies with a sales backlog from last year can sustain their business by executing the construction plans to create revenue recognition. But those with smaller backlogs will not have peace. Without new sales, revenue recognition for the second half of the year will drop more than it should. And if the political deadlock continues into next quarter, the home-building business will suffer more. Home-builders should adopt a belt-tightening scheme for the business by reducing every cost item. First to consider is construction cost. Although the present labour situation may not permit major cost-cutting, budget control is perhaps the best bet.
Second, the marketing and advertising budget must be spent carefully, otherwise money will be wasted in return for nothing. As of now, most companies choose to postpone marketing events indefinitely.
Third, home-builders have had to control operating costs since the beginning of the year. Any policy applied during the past economic meltdown must be exhausted. To consider saving even toilet paper cannot be ruled out.
On personnel management, new recruitment becomes unthinkable. Staff must work harder and begin multitasking. And if the problem spills into the second half of the year, retrenchment may become inevitable.
Concerning backlogs, the focus should be on customer care in terms of home and service quality.
This is the only time that home-builders will have the luxury of spending time with their customers.
One must please customers to win their hearts and minds so they become the business’ public relations asset for quality satisfaction in the future.
It is also recommended that other units that do not deal directly with customers pay more attention to operating processes by trying to improve them to ensure customer satisfaction.
For example, focus more on finding solutions to frequently occurring problems in construction work that have failed customers or making the process smooth and staff happy.
Having said that, I sign off with the wish to see a solution to the political crisis so that the country can move on fast.