Combining policy and technology to redefine how the property sector operates in a post-COVID world

Photo taken from

Renovating Indonesia’s property sector for post-COVID19

Combining policy and technology to redefine how the property sector operates in a post-COVID world

Kevin Peterson works at the Strategy Finance and Operations team of Pinhome, a Jakarta-based real estate technology company. Prior to Pinhome, Kevin was an investment analyst at Insignia Ventures. 

Many predicted that the property market would strengthen in 2020 after the government launched a series of stimuli to increase demand, including a mortgage cut from 10% to 5% and a US$725M stimulus package in February. COVID19 — and especially Indonesia’s response to it — has changed the situation entirely, resulting in a cash-strapped market and an industry forced to rethink business. With many industries digitalising to deal with this 180 degree scenario, Indonesia’s property sector is no different. Technology will play a significant role coming out of this crisis. I explore how it works hand-in-hand with policy, not just for the industry to bounce back, but also to reimagine a new future. 

Assessing the impact

Both sides of the market are dealing with a cash crunch. The impact on buyers will force many to default on mortgage and rental payments. Due to social distancing measures, spaces for work and retail face record low activity. It is unlikely for new leases to be signed in Q2 this year, with business expansion plans deferring new openings.

The clouded outlook on demand has tightened the belts on the supply end as well, with some residential developers postponing launching events and putting projects on hold. These cash flow difficulties will result in higher construction loan rates. Moody’s lowered the credit ratings of property developers PT Agung Podomoro Land and PT Alam Sutera Realty, citing the heightening risks over liquidity and ability to repay debts as primary concerns. 

Aside from the cash crunch, property managers, brokers and developers are also redefining the customer journey. Some developers are enabling 3D viewing of their projects online and some brokers are managing transactions and visits without physical contact. 

Along with new ways of doing business, properties, especially public spaces, need to meet new standards of cleanliness and safety. The confidence with which businesses and consumers will get out of lockdown depends highly on how well properties are able to meet public health standards. 

Finding answers to the challenge of recovery

Indonesia’s property sector has been struck by lightning in the midst of a storm that is far from over. With the cash crunch and transition to new ways of doing business weighing heavily like a crashed-in roof, the market needs to get in shape for recovery and a post-COVID world

When it comes to recovery, the world has been looking at how first-hit China has been dealing with reopening after an initial two month lockdown. In terms of property sales, China has been seeing some growth post-reopening, albeit tentative and on the heels of a slowdown in last year’s gains. 

Data from Capital Economics tracking the number of property sales across 30 major Chinese cities reveals around an 8x increase in sales between the first 17 days of March and the same period in February. However, this recovery is only impressive because of the steep decline in sales from 7929 units by the end of last year to just 22 by early February

Taken from

Policy: cushioning the fall to bounce back safely

A recovery is a recovery nonetheless — and at the heart of it is policy, both from the government and private organizations, that serves as a cushion for the cash crunch and a foundation for reopening the economy from lockdown

Government policy played a fundamental role in stabilizing China’s real estate market, providing property tax waivers for SME tenants, reduced rents and extended rent-free periods, as well as an easing of financing costs. The policies targeted cash-strapped stakeholders, cushioning the market. Apart from financial programs, the public health protocols were set in place to ensure standards of cleanliness and safety are met by establishments before reopening.

The Indonesian government has also enacted policies through PERPPU 2020 to support various stakeholders in the market through the cash crunch, including

  • accelerated distribution of social assistance and public housing subsidies for landlords
  • restaurant and hotel tax exemptions for tenants
  • postponement of income tax article 22 for SMEs in 19 sectors

In Indonesia specifically, currency depreciation represents a significant discount opportunity for new, foreign capital entering the market. This can be an additional consideration for government policy to support local real estate investments. Foreign investors could actually benefit from the current weakened rupiah, compared to other currencies such as the USD, SGD, JPY, HKD. 

Government-initiated policy can provide the foundation for market players to introduce their own initiatives for recovery. Developers are in a position to offer creative and unique offers for business and retail customers preserving cash. Flexible payment terms (i.e. downpayment through instalment, rent to own, etc), and temporary ownership (i.e. rental for furniture) or co-ownership for high ticket size items could be other alternatives to attract customers. 

The best public health policies can be ineffective if private organizations like businesses don’t follow through with their own internal policies. Cooperation is critical between landlords and local government units to manage foot traffic, ensure clean environments, and facilitate contact tracing where necessary. 

Companies can increase employee confidence in returning to work with a ‘re-entry checklist’ that needs to be met prior to reopening, including measures like staggered schedules, equipment sharing guidelines, and workspace cleaning operations. 

Companies should also prioritize redesigning and refitting the workplace to provide a safe environment. For example, commercial real estate company Cushman & Wakefield developed the “Six Feet Office” concept from helping 10,000 organizations in China revamp office layouts as people returned to work. Chinese office buildings have also been installing air filtration systems for years already which Cushman & Wakefield say has enabled a quicker return to work

Technology: accelerating recovery

If policy is the foundation for recovery, technology accelerates it and makes recovery scalable and efficient. In China, property players are working with online platforms to leverage technology. China’s largest classifieds site and real estate platform Anjuke, for example, offers limited-time VR and live streaming services for buyers to select a house without ever having to visit in person. With new public health standards likewise forcing Indonesia’s property sector to rethink the customer experience and property management, technology can have a pivotal role to play in this transition. 

When it comes to the customer experience, developers and owners can explore new ways to do property & show-unit viewing. With the help of listing apps and VR/AR/360 cameras, prospective buyers can get a high-level virtual tour of properties before making a visit. Property manager Royal Sentul Park (RSP) enables buyers to view properties through 360 cameras. Apart from virtual tours, self-tours are an option for vacant home listings. Redfin, a real estate brokerage company in the US, launched a feature that lets prospective buyers self-tour vacant listings on their own schedule, without an agent. 

Agents can also manage interactions and close deals online. With the help of online platforms, agents can manage property listings and close transactions with minimal physical presence. Pinhome’s platform bridges the gap between agents and developers/customers through proprietary agent apps that facilitate property transactions.

Just as many aspects of the customer journey are moving online and becoming contactless, property management can be done remotely. Not only does this adhere to public health policies, but remote property management tools can lower operating cost while ensuring more data-driven and real-time monitoring of a property. Sensors can be installed to open doors automatically. Voice-activated tools or face recognition minimize the need for physical interaction when gaining access to areas on a property. 

It’s not just tools but entire systems that can be automated. For example, Enertiv provides end-to-end, data-driven infrastructure for commercial real estate portfolios. Locale’s Group service enables residents to communicate amongst each other, with building staff, and with residents’ friends and family. 


The COVID19 crisis overhead has not yet cleared. Even then, there is a need to prepare for the new normal beyond, with most of the world coming out of lockdown. As we’ve seen with the reopening of China’s economy, there has been greater momentum to digitalise the property sector for the post-COVID world. Meanwhile, financial support programs and safety policies were introduced to protect business operations and consumer confidence. The property sector is foundational to cities, businesses, and families. This means a similar combination of policy and digitalisation, suited to the needs of Indonesians, will be critical, not just for the sector, but the country as well. 



  1. Knight Frank, Capital Economics
  2. APAC Research Report by JLL (17 April 2020)
  3. Dorsey & Whitney LLP (6 March 2020)
  4. PERPPU 2020
Website | + posts