BY VIKTOR CHONG

Property valuation is more than a maths game

KUALA LUMPUR: Just because your neighbours are selling a property at a high price does not pertain that you can do the same. There are many factors need to be considered when pricing a property, according to Propedia Consultancy founder Sr Vicky How.

“Is your property facing west? Note that the properties that face west will use up a lot of energy. You might be paying double the amount of cost in electricity bill compared to your neighbours especially when air conditioning is used.

“This is because the unit is usually ‘hotter’. People tend to avoid a property that is facing west, especially a landed property,” she said.

How also advised the audience to note the view of the property in question. “Your neighbour’s house might be facing a beautiful green field while yours is facing a T-junction or a high-rise condominium.

“Do understand that a property facing a T-junction might require more insurance premium as it is prone to accidents. Just look into the newspapers, and you will notice that most properties that are involved in accidents are usually the ones situated around the corner or at T-junctions,” said How.

“Another context is the presence of public schools or a night market at the vicinity of your home. Notice that having a public school nearby will result in traffic jams. Personally, I love going to the night market for food, but nobody will enjoy having others park near their house and blocking the way,” she said.

“Direct accessibility of the development to the highway is also essential. Just because the said property is near the highway does not mean that its value will increase. You must make sure that the property is directly accessible to the road to enjoy its facilities.

“It will defeat the purpose if you need to be stuck in a traffic jam for half an hour just to arrive at the highway. Even worse, you will also have to suffer the noise pollution and dust that is created from the passing cars,” said How.

She also pointed out towards the phenomenon at Canary Wharf.

“Canary Wharf is a financial district in the east of London. When they started off, the price of the property there was meagre, and everyone believed that it would fail.

“Currently, the price for one studio is at 500,000 pounds. In the past, it was barely 100,000 pounds per studio. As a financial district, this area is populated by bankers and financial planners with an average annual salary of around 500,000 pounds per year.

"With such a purchasing power, it is easy for them to buy a house. Hence the price of the property at Canary Wharf increased very quickly after the people there started making money and settling down,” said How.

She believed that the Tun Razak Exchange at the centre of Kuala Lumpur would replicate the same phenomenon as in the Canary Wharf.

“Currently, the property in Kuala Lumpur city centre isn’t doing too well. Due to the drop in petrol prices, a vast number of expatriate are forced to resign and go back to their country.

“As the price of petrol is rising, there is a probability that they will get their jobs back. The Tun Razak Exchange will be completed by the year 2027, generating around 40,000 skilled workers. Insurance companies, banking institutions, stock markets and currency exchanges will be settling down in this area, and the price of property will most likely be appreciating there,” she said.

How also shared some of the necessary measurements a property valuer uses. “We will look into all the past transactions on Jabatan Penilaian Dan Perkhidmatan Harta (JPPH) and summarise it. As valuers, we will see the average price of the property.

“Upon inspection, the valuer will check for any renovation. Does the property have plaster ceiling, improvised flooring or a kitchen cabinet?

“Extensions will increase the value of the property if they come with a permit. Illegal extensions, however, will not be taken into account. Do note that the material cost of the property extension will increase the current market value,” she said.

Vicky recently spoke at the Malaysian Property Expo 2017 (MAPEX) on Oct 13 at Mid Valley.