Although very rare in Malaysia, property depreciation or devaluation does indeed happen. Although it does not happen to entire housing areas, or entire commercial projects, it does sometimes happen to individual houses or commercial lots.

Some of these causes cannot be controlled, but some of them are within the prerogative of the owner to improve on it. The foremost causes of property devaluation are:

Improper Maintenance



Decaying roofs, crumbling ceilings, peeling paint and cracked cement are just some signs that a house is in a dire state of disrepair. These type of properties are considered fixer uppers so the next owner is expected to spend on repairs and upgrades. This serves to draw the price of a property down so as to obtain a willing buyer.

Terrible Neighbours



Noisy and inconsiderate neighbours can be the bane of any one’s existence. It can unfortunately be the bane of your property’s value too. Throwing trash and uncontrollable noise is actually quite mild as some houses have experienced having neighbours who are involved in drug manufacturing or dealing, violence, underground mafia activity, prostitution and other anti-social behaviour. This will give the impression that your property is located in an unsavoury neighbourhood, thus preventing its appreciation.

Natural Disasters



Here in Malaysia, natural disasters are not common, except for floods. If you own a property in a flood prone area, even though your property has never actually been hit by it, the fact that the area is flood prone may prevent its value from rising up much further.

Too Many Foreclosures



Your property may be at risk from depreciation if many of the other units in your project have owners who are unable to service their loan and the bank has to reclaim it. This will (in many cases) cause the unit to be auctioned off and auctioned properties usually fetch a lower-than-market price, setting the price range for your unit lower as well.

Inaccessibility and Lack of Amenities



This one is pretty self-explanatory whereby if there is only one narrow road to your neighbourhood and more and more projects are being built in the area, causing a traffic congestion at peak hours, the chances are that your property’s value may not rise as quickly as you hoped. This also applies to properties which are extremely far from the nearest amenities like shops and schools.