Factors which influences property prices
Sky rocketing property prices remain a very real talking point among fellow Malaysians.
Local loan comparison and housing advisory website, loanstreet.com, lists down the few main factors that influences property prices.
The first factor that influences property prices is the condition of the tenure — whether it is freehold or leasehold.
Ownership in freehold property remains with its titleholder without a time limit unless transferred legally to another party, while leasehold is a fixed asset with maximum lease period of 99 years. Eventually, it has to be returned to the government or the current owner needs to pay a fee to lease it further.
According to the site, the property prices under the freehold tenure may differ from the leasehold as it could be higher or lower, but it is well known that freehold properties tend to perform better in terms of long-term capital appreciation.
Another is location, which works differently for different individuals.
Loanstreet mentioned that the distance between the property from a school, workplace and retailing outlets would play a major role in its pricing.
“Generally, the closer they are to the housing areas, homeowners are expected to fork out more for the luxury.
“Availability of shopping centres and hypermarkets nearby definitely adds value to the premise. After all, shopping is one of the top family activities,” it said.
Security of the property also plays an important role in the pricing.
“With the current rising crime rates in Malaysia, any housing with added security becomes a necessity. Gated and fully landscaped neighbourhood with perimeter walls, security personnel and closed-circuit television cameras are desirable for the safe-minded individuals. A premium can be inserted in the housing price if the community is fully secured,” said Loanstreet.
A factor that young working adults take into consideration would be the environment.
With a shortage of green spaces, most individuals prefer areas with natural landscape and views of greenery.
“The cost of planting native tree species around the property is reflected in the higher price of property and has an acceptable threshold of environmental quality.”
Accessibility also factors into the price where most Malaysians who are unable to afford private transport would rely on public transport. This means a location near a bus station or MRT station would influence the price of the property.
The influence can be either positive or negative. If the property is too close to a bus station or MRT station, it could result in congestion, noise and petty crimes and thus bring down the value of the property.
“Housing areas with easy access to highways, such as the LDP or Kesas, are in great demand, therefore, the houses there cost more.
“For those with cars, we all know how frustrating it is hunting for car parks. Countless litres of petrol are wasted searching for parking bays. So ample car parking spaces make a particular area more attractive.”
Those looking for a long-term tenureship should look at another factor, which is future development.
“High-end areas with appreciative development in the future are obviously valued more. One example includes the rezoning of land in Section 13 of Petaling Jaya from industrial use to commercial use. As a result of this shift, the value of this location spiked up.”
In conclusion, Loanstreet makes a general rule of thumb that a freehold property with a desirable location, efficient accessibility and ample space for development are consistent with uprising prices.
For more information, visit: http://loanstreet.com.my
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