News & Articles Factors Affecting Property Prices in Malaysia

Factors Affecting Property Prices in Malaysia


28 Oct 2015
Factors Affecting Property Prices in Malaysia
The rise and fall of property prices doesn’t just happen by chance. They are the result of a cause and effect system that depends on many external factors. In recent times, both domestic and commercial properties have undergone a surge in prices, making us normal folk wonder what is driving them up at an unprecedented rate.

Here are some of the possible aspects that strongly influence the going rates of property:

1) Nearby Amenities



With the city becoming more and more populated, new malls, schools and other amenities are rapidly being built. This means that apartments and houses are being built nearer and nearer to conveniently located amenities. Therefore if a residential property is located within short driving distance to the nearest school, mall, post office or convenience store, the price will be higher than projects that are located way out in the middle of nowhere.

2) Rise of Building Material Costs



Partly because of inflation and partly because of GST, the materials needed for building has risen dramatically over the years, giving developers no choice but to pass on the extra costs to their buyers and this driving up property prices somewhat.

3) Rise in Demand and Population



The continuous influx of migrants, both local and foreign into urban and suburban areas in Malaysia has caused the demand for property to rise drastically. Therefore, as demand increases and the supply does not grow fast enough to catch on to it, the price of properties in the area will spike.

4) Access to Roads and Transport



If a certain housing or commercial project is just beside a major highway, near to a train station or within walking distance of a bus station, it is natural that the price of that property will be higher than somewhere else that you have to drive far and spend forever to find suitable parking.

5) Land price



The property you are looking to buy is also heavily reliant on the price of the land it is built on. Land prices are pretty much higher in the City centre and reduce the further away you are from the urban centre.

6) Future Plans for the Area



If there are plans to build more highways, roads, high end apartments and train stations near a certain property in the future, the price of that property will naturally appreciate. This also applies to situations whereby there are plans to build a large office or commercial area nearby in which many white collar workers are expected to work.

Source: DurianProperty.com

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