The secret to spotting rising value The secret to spotting rising value
Share this on WhatsAppPrices are sky high! No matter how many times you’ve heard it said, this statement never fails to make you shudder... The secret to spotting rising value

Prices are sky high! No matter how many times you’ve heard it said, this statement never fails to make you shudder – especially if you have not secured a permanent home for your family. Of course, once you have made a purchase, news of rising prices will be seen as a good thing.

The thing is, prices will always rise, and in the long run, you’ll want it to so you can reap the benefits of your investment. You may have to struggle to make the price mark of a property you desire now, but if it is the right investment, you will get it back in tenfold.

However, if you’re going to empty the coffers you should at least make sure you are putting your money into something that has high potential for capital appreciation. This will go a long way towards lessening your fiscal pain.

According to loan and housing advisory website loanstreet.com.my, one of the first factors that can influence the future pricing of your property is the tenure. Is it freehold or leasehold?

Ownership of freehold property means the house and land remains with its titleholder without a time limit, unless transferred legally to another party. Leasehold property is a fixed asset with maximum lease period of 99 years. Eventually, it has to either be returned to the government, or in most cases, the owner can pay a fee to extend the lease.

Property prices under the freehold tenure may differ from 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 gain. This is because leasehold properties have an “expiry” date, and the closer you are to that date, the less your asking price will be.

Another big factor is location. While “location, location, location” is the preeminent mantra of the property world, the truth is “location” means different things to different people.

For many, the distance between the property and schools, the workplace and/or retailing outlets play a defining role in its appeal, and thus its value. Generally, homebuyers will be willing to pay a little extra for the convenience and this will put more “oomph” in your asking price.

Security is one factor that Malaysians list as a top priority in their choice of property. Neighbourhoods with low crime rates certainly command better prices, but owners can also improve on house values by enhancing the security features of their home.

Gated and fully landscaped neighbourhoods with perimeter walls, security personnel and closed-circuit television cameras are desirable for the safe-minded individuals. Properties located in communities such as these have a proven track record of performing better where price is concerned.

In recent times, lifestyle features and the surrounding environment are becoming more and more important. With green spaces rapidly diminishing in urban centres, buyers of tomorrow will likely pay a handsome sum for properties that offer or are located close to greenery.

The cost of planting native tree species around the property is reflected in the higher price of property as it offers acceptable threshold of environmental quality.

Another factor brought about by rapid urbanisation is accessibility. Buying close to highway access routes was a good strategy in the past, but these days, it simply means you will have to cope with bottlenecked traffic congestion close to your home. The way of the future is to secure a property that is close to public transportation links.

As Malaysia’s population grows, driving to work will soon become an encumbrance rather than a luxury. This means a location close to a bus station or MRT station would positively influence the price of the property.

However, beware! If the property is too close to a bus station or MRT station, it could result in congestion, noise and petty crime. These could have a reverse effect on the value of the property.

For those with cars, ample car parking spaces in and around the property can also hugely boost its price. Many neighbourhoods these days are congested, and fighting for space can lead to unwanted confrontations with neighbours. So widely spaced housing areas will generally be more appealing.

Those looking for a long-term tenureship should seriously consider another factor, which is often overlooked, and that 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, Petaling Jaya, from industrial use to commercial use.  As a result of this shift, values there and in surrounding areas witnessed a sharp spike.

Here again, the reverse can be true. If a property is purchased close to an appealing green park or lake, but in the future this makes way for a high density development (that results in suffocating congestion and a degradation of hygiene), then prices will suffer.

In summary, the general rule of thumb is look for a freehold property within a desirable location, with efficient accessibility and ample space for value-added development. Tick these boxes and you should be laughing all the way to the bank.

Property 360 Online

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