Regardless of where you are in Malaysia; we often hear “property prices are escalating”, “property now is very expensive”, “property is no longer affordable”, and so on. However, in certain cases, there is a probability where a property’s value can decrease.
Truth is, a property’s value in Malaysia can be influenced in so many ways, be it reasonable or not. Read on to find out the things that can affect the value of a property in Malaysia.
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The 5 conditions that can decrease a property’s value
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1. Supernatural discovery
The reason: Haunted house is a definite no-no unless you’re into paranormal activities.
If the thought of seeing someone else’s reflection in the mirror or hearing a baby cry at night (when you don’t have a baby) scares the living daylights out of you, then you are not alone.
Living in a superstitious country such as Malaysia, even when a murder or uncertain death takes place in a house, the house is automatically labelled as a haunted house. Such a scenario will hardly attract any buyers. Thus, the property might be sold at below market price.
Remember that gruesome incident in Mont Kiara where they found a dead man’s body chopped up into 11 pieces in a property that was bought during an auction? Since that horrifying event, numerous people were frightened by auction properties and try to avoid buying auction property.
2. Structural problems
The reason: If it happened once, it might happen again and again.
When a construction goes wrong, that is when you get news headlines like “walls collapsed over body”, “roof went flying during thunderstorm”, “windows are randomly breaking”, or even “water coming out of cracked walls”.
Once unfortunate events like these occur, people will start to doubt the structure of properties in the whole neighbourhood.
Remember when Highland Towers collapsed and killed 48 people? Till today, many people are still appalled by that disaster that they try to avoid buying a property there or even visit the area.
Plus, weak or unstable structures are not only a nuisance to repair, but the costs of frequent repairs can be really high.
3. Unlucky numbers
The reason: These are the things that bring bad luck into the house, and straight into your life.
Does this sequence seems familiar to you: 1, 2, 3, 3A, 5, 6, 10, 11, 12, 13, 13A, 15?
Though you might only see the replacement of 3A and 13A in Malaysia, but this practice of avoiding instances of the number 4 is called Tetraphobia, a superstition that is very common across East Asian and Southeast Asian regions.
The number ‘4’ is the unlucky number in Chinese culture as the pronunciation of number 4 in Hokkien, Mandarin and Cantonese sounds like the word “death".
However, in Indian culture, the number ‘8’ is considered unlucky. So if you are selling property to a Chinese or an Indian, by all means please don’t show the Chinese the number 4 units, and the Indian the number 8 units.
Hey, maybe next time we’ll see 7A and 17A. Who knows right?
4. Ex-mining pool area
The reason: There is a chance that the house might sink along with you.
It has been more than two decades since ex-mining pool areas in Malaysia started to be developed into housing developments. Nevertheless, some homebuyers are still concerned about sinkholes.
Why? Because just last year, three houses in Kampung Pengkalan Gate Tambahan Dua, Ipoh, Perak were damaged by a five-metre deep sinkhole. Scary, isn’t it?
But then again, there is a case where an ex-mining area was developed into a very successful neighbourhood. For example, Bandar Sunway is now a prominent location where you can find almost everything that you need and it even has that awesomely famous amusement park.
5. Overwhelming crime rate
The reason: Hmm, don’t think it is a safe environment to live in.
Crime rate is known to have an impact on a property’s value. If the crime rate is low, then there is a high chance that the property’s value can increase. But if the crime rate is high, there’s a possibility that the property’s value will decrease.
When persistent robbery attacks happen in an area, many will definitely try to stay away from such an unsafe neighbourhood, especially those with kids.
We all seek for a secure and safe living environment, and that is why we see many developers promoting gated and guarded residences.
One thing that you wouldn’t want to ask yourself before stepping out of the house every single day is, do you dare leave your house unattended?
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The 5 conditions that can increase a property’s value
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1. GST implementation
The reason: It is pretty obvious that price will increase with tax.
Though we are aware that when we purchase a property, there is no GST (the 6% tax implemented on April 1st) transacted on our sales receipt, but the developers might transfer the extra expenses from raw material to the property’s price sale.
But then again, you can always opt for subsale units, which will not be charged with hidden or unhidden GST.
2. Near public transportation
The reason: Going out and about will be a piece of cake.
Guess what? According to the Nielsen Global Survey of Automotive Demand (2014), Malaysia’s car ownership is at 93%, which places us at the third place globally.
No wonder the traffic in Malaysia can be so congested, especially in the city. So, it could be a blessing to be able to own a property that is close to public transportation, such as KTM, Light Rail Transit (LRT), Bus Rapid Transit (BRT) or the future Mass Rapid Transit (MRT).
If you only have to walk a short distance to the nearest station, you might be able to skip waking up at 5am to go to your 9am job. However, you need to make sure that there is a public transportation hub near your office though.
3. Shopping spree
The reason: How can you not love going to a shopping mall?
Shopping mall is the perfect place to hang out, dine, watch movies, go bowling, do window shopping, or even to shop till you drop. Having a property near a shopping destination is not only very convenient, but is very valuable.
Most residential areas with famous shopping malls see property prices escalating fast. For example, the value of the properties around One Utama, Sunway Pyramid and Pavilion Kuala Lumpur increased exponentially over time.
If you think the shopping scene here is mundane, take note and be proud that CNN Travel had voted Kuala Lumpur as the fourth best shopping city in the world for two years in a row in 2012 and 2013.
4. Expat neighbours
The reason: High-earners attracted to certain neighbourhood due to amenities.
Expatriates are known to afford high-end properties, such as KLCC, Bangsar and Mont Kiara. These neighbourhoods are generally known for the multitude of amenities that has attracted many expats to live within its vicinity.
The prices of property in KLCC have increased due to its prestigious address. When you walk into a neighbourhood and see expats strolling around, the first thing that might come across your head is, “Wow, this must be an affluent area!”
5. Universities around
The reason: Ample of students fishing for rental units.
Property prices has a high chance to appreciate when there are several universities around the housing area because there is ongoing competition between homebuyers who are buying for their own stay and property investors who are investing for rental yield.
An example of such a hotspot area is Subang Jaya where Taylor’s College, SEGi College, INTI International University & Colleges and Westminster International College are located. The properties are in high demand by the students and the University staffs that when one tenant moves out, the owner might already have a waiting list.
Now that you know the top things that affect the Malaysian properties, make sure you do your research and choose your next property wisely.
- The Star Property, 25 August 2015