Property Development And Price Analysis Economics Essay
The high-rise edifices are more common in Malaysia particularly in Johor Bahru and development of condominium units can optimize the land usage. There are a batch of new developments of tower block edifice based on the Iskandar Project. There are advantages of condominium to occupants, such as installations provided, security, and suited for little family or twosomes. There are few types of flat and condominiums are developed in Malaysia such as studio unit, duplex unit, and penthouse unit. Basically, different types of condominium the monetary values of condominium besides will be different. Price varies will be depend to the built up country of edifice, location of edifice, installations and so on.
There are a batch of factors affect the monetary value of flat and condominium in existent estate market. This chapter will discourse about the literature reappraisal of factors-factors that can be impacting the monetary values of flat and condominium. It besides will transport out the definition of the factors and how they impacting the monetary values.
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In the other manus, this chapter besides will discourse the belongings market analysis tools such as multiple arrested development analysis ( MRA ) and likert grading. It will discourse what the multiple arrested development analysis is and how to carry on the analysis to place which are the important factor to act upon the monetary values of flat and condominium in Johor Bahru.
Property Development and Price Analysis of Apartment and Condominium in Johor Bahru
Definition and Types of Apartment and Condominium
Apartment is a self-contained lodging unit that occupied merely of a edifice or a subdivision in the edifice. Normally, the occupied will portion a common country or installation like anteroom, auto park, lifts and other installation. An flat will dwell the basic installations such as swimming pool and guard house.
A condominium is a signifier of house unit in a multi-dwelling edifice where all the units is separately owned and the common countries are jointly owned by the unit proprietors. The common name of condominium is “ condo ” in Malaysia. The proprietors and residents of condominium are capable to follow regulations and ordinances of the condominium. Besides that, condominium besides will supply full installations like swimming pool, gym room, nine house, CCTV, inter-com, guards which distinguished it from flat type of life. In the other manus, the installations of condominium are depends to the direction, because different condominium provide different installations.
Condominium unit can be classified into several types in Malaya:
This type of condominium consists chiefly of a big room which is the dining, life and sleeping room combined. The kitchen installation as portion of this cardinal room, but the bathroom is its ain smaller separate room. Besides that, there are one-bedroom, two-bedrooms, three-bedrooms and four sleeping rooms, where one sleeping room, two, three or four sleeping room are separate for the remainder of the condominium unit.
Penthouse is different with studio unit, this type of condominium is a particular unit and the built up country are different with the studio unit. Normally, developer will construct the penthouse unit at the top of the edifice and differentiate by alone characteristics such as out-of-door patios, private entryway or lift, height ceiling, private swimming pool and other installation. Penthouse unit is really alone, therefore the monetary value of penthouse unit will be more expensive than studio unit.
Duplex is another type of condominium in Malaysia, it is a individual home unit spread over two floors connected by an indoor stairway in a condominium penthouse. Normally, this type of condominium is suited for the large household or there are a batch of residents live in semidetached house. Generally, duplex unit are the more expensive and associated with a luxury life style.
Price Analysis of Condominium in Johor Bahru
Monetary value analysis is the procedure of make up one’s minding if a monetary value of merchandise or service is just and sensible without analyzing the particular cost and net income computations the seller used in geting at the monetary value
Table 2.1: Monetary value Analysis of Apartment and Condominium in Johor Bahru
Built up country ( sq.ft. )
Price ( RM )
Price ( RM per sq.ft. )
End 2015 ( Expected )
915 – 1,286
Seri Austin Residence Luxury Apartment
Seri Austin, Johor Bahru
Macintosh 2015 ( Expected )
342 – 450
End of 1996
1,378 – 1,765
482,227 – 600,000
339 – 349
Indah Samudra Condominium
Jalan Sungai Chat
End of 1994
1,324 – 2,433
350,000 – 530,000
217 – 264
Beginning: Transaction Data of Valuation and Property Service Office ( JPPH ) , Website of i-property.
From the tabular array 2.1, the tabular array show the belongings monetary values of new development condominium and monetary values of bing condominium. The condominium of Puteri Habour and Seri Austin Residence Luxury Apartment are the new developmen in Johor Bahru. On the other manus, Petrie condominium and Indah Samudra is bing condominium. From the tabular array, the monetary value per square pes of unit Puteri Habour is around RM 915 to RM 1,286 per quare pes, and the monetary value of Seri Austin abode Luxury Apartment is around RM 342 to RM 450 per square pes. While, the monetary value for Petrie condominium and Indah Samudra condominium is around RM 217 per sqaure pes to RM 349 per sqaure pes. If compare the monetary value of condominium Puteri Habour and Petrie Condominium, the monetary value are addition about 63 % to 73 % per unit. Therefore, this survey will discourse the important factors are and cause the condominium monetary values are increasing in Johor Bahru.
Factors-factors that Affect Apartment and Condominium Monetary values
Location of a belongings will be considered in the rating procedure. ( Follain & A ; Jimenez, 1985 ; Oxford 1988 ) stated the fixed location properties are quantified with regard to the whole urban country and pertain to some signifier of handiness step. There is a batch of research survey the location of a belongings in term of fixed and comparative location properties. There are a batch of measuring for the location attributes, such as handiness, transit and vicinity. These sub-factors will be discussed in this chapter.
Accessibility is a measured in term of entree to the Central Business District ( CBD ) in traditional position of location. Accessibility has some affect on lodging monetary value from much signifier it has been measured ( McMillan, Jarmin, & A ; Thorsnes, 1992 ; Palmquist, 1992 ; Ridker & A ; Henning, 1968 ) . The trade-off theory of residential location besides stated that when the belongings is nearer to the Central Business District ( CBD ) , the higher monetary value of the belongings ( Evans, 1980 & A ; 1983, Bums & A ; Mittleback, 1964 ; Kain, 1983. This theory is assumes that the occupant of lodging will take a location that provide a balance or tradeoff between residential costs and transit costs. Accessibility is an of import factor to be considered for the flat and condominium purchasers, this is because when the flat and condominium is near with Central Business District ( CBD ) , the monetary value of flat and condominium will be higher. Therefore, it can be concluded that handiness will give impact to the monetary values of belongings.
Transportation factor is linked with the handiness factor. It is means refer to the purchasers who does non have a auto, because they need public conveyance go to other topographic points. ( Adair, Greal, Smyth, Cooper, & A ; Ryley, 2000 ; So et al. , 1996 ) stated conveyance handiness is measured by going point, convenience, and handiness of different conveyance manners and the conveyance is often to utilize by occupant. So et Al. ‘s ( 1996 ) survey in Hong Kong on conveyance handiness, measured by the distances to the nearest Stationss of the mass theodolite railroad ( MTR ) , coachs, and minibuses, revealed a high dependance on public conveyance in the district. Residents of flat will see the most convenience public conveyance to their topographic point of employment, shopping, nutrient tribunal and other topographic points. There is a positive influence of good public conveyance service on lodging monetary values.
A lodging vicinity is a group of homes located in same lodging countries and have similar physical, environmental, societal and economic feature. Normally, the categorization of vicinity is to place the environmental qualities within and around the vicinity. Before a family purchase the belongings, they will see the quality of its possible vicinity such as school, constabulary station, and the public services provided to that vicinity. Household will prefer the unrecorded near with these public services where the return on their lodging investing will be highest. A good vicinity will give positive impact to the belongings, this is because house purchasers are willing to pay excess for a house with a good environmental qualities. ( Tan Teck Hong, 2008 )
The structural properties is really of import to a value of belongings and it could hold brought impacts on house monetary values ( Chin, Chau & A ; Ng, 2004 ) . This attributes include the figure of suites and floor country are comparatively of import across states. There are a batch of properties, such as built up country, the size of life and dining country, figure of sleeping rooms and bathrooms in a house, auto porch, age of edifice, tallness of edifice, term of office, quality of coatings and the internal and external construction of a house. ( Arimah, 1992 ; Laakso & A ; Loikkanen, 1995 ; Tiwari & A ; Parikh, 1998 ; Wilhelmsson, 2000 ; Tse & A ; Love, 2000 ) Actually, the good quality structural properties have a positive impact on lodging monetary value. Harmonizing to Wong and Wolverton ( 2002 ) , the tallness of edifice will act upon the monetary value of belongings in Hong Kong, where densenesss are high. The different floor degree, therefore the position of the edifice besides will be different. The age and size of edifice besides will give an impact to the edifice. When the age of the edifice is old and less care, the status of the edifice will be non good and the cost for future care will increase. The internal and external of the edifice such as auto porch, extent the kitchen, quality of coatings and ceiling besides will act upon the monetary value of belongings.
In Malaysia, there are some flats and condominiums have sufficient diversion installations such as swimming pool. Normally, the installation available in flat is lesser than condominium. Obviously, Condominium have a batch of installations such as wading pools with Jacuzzi, squash tribunal, gym and sweat room room, BBQ corner, cafeteria and convenience shop. From above that, the installations of wading pools with Jacuzzi, gym and sweat room room demand higher care fee and higher cost, hence those installations are non available for flat. When the care fee or cost of installation is higher, the direction fee of condominium besides will be higher. Besides that, when a condominium provides the installations such as a private clubhouse and swimming pool, the monetary value of condominium will be higher ( Mok, Chan & A ; Cho, 1995 ; Tse & A ; Love, 2000 ; Hui et Al, 2006 ) . Hence, the installations can supply occupants with daily societal activity demand and these installations will convey some positive impacts on belongings monetary values.
Gated and Guarded
Blandy and Sarah, ( 2006 ) stated that gated community has a fencing or wall around the resident country, and the map of this gated community is restricts or command the entree for non-residents, has private internal roads and can pull off by direction company. The most popular tools for the gated-guarded community are perimeter walls and fencings, security forces such as CCTV, and professional belongings direction. The CCTV installed along the margin fence, it can assist to supervise visitant and foreigners. Due to the higher rate of offense in Malaysia, the figure of residential country install CCTV was increased in the residential country. When the high rise condominium belongingss have 24 hours security system, hence non-residents can non come in these belongingss without permissions. Hence, this security can assist to cut down offense in residential countries. Harmonizing to the abode directors ‘ point, a batch of occupant will wish to populate in condominium for higher security.
Strata developments like condominium are pulling foreign belongings purchasers particularly Singaporean prefers buy a belongings in Johor Bahru. Foreigners mean that there are non-Malaysian citizen, they can purchase any type of belongings in Malaysia, which are condominium, bungalows or even land. Even though so can purchase belongingss in Malaysia, but they besides need to follow the limitation, Guideline on the Acquisition of Properties issues by the Economic Planning Unit of the Prime Minister ‘s Department stated the minimal purchase monetary value for alien to purchase a is RM 500,000 or above per unit. They besides can non purchase the residential units under the class of low-medium cost and the belongingss built on Malay Reserved land or belongingss allocated to Bumiputera. Steve Melhuish, ( 2012 ) stated there are 25 per cent of abroad purchasers are come from Singapore particularly belongingss in Johor Bahru. Besides that, the authorities besides promotes the My Second Home Programme ( MM2H ) to pull foreign purchasers where are Malayan Bankss offering friendly loaning footings to the aliens. Due to the plan, therefore a batch of developers will construct up the high rise edifice and the monetary value per unit are RM500, 000 above to pull alien.
Mortgage Interest Rate
Harmonizing to Nicholas Apergis, ( 2003 ) , mortgage involvement rate can impact the lodging monetary values and the building of new house. Interest rate is the monetary value of money. The mortgage involvement rate is really of import to the place purchasers, this is because it will act upon the consumer outgo through lodging wealth. In other word, when the mortgage involvement rate additions, purchasers need to pass more money for loan to purchase a belongings. Hence, people will forestall from purchasing house on that clip.
Household income will act upon the lodging demand where the incomes of people increasing and possible demand for lodging besides are will increase ( R.G.Ariyawansa & A ; A.G.P.I Udayanthika, 2011 ) . Case and Shiller ( 1990 ) besides stated employment, buildings costs, income, and population will impact the current lodging monetary values. When the employment rate has increased and the employment rate will be lessening. In other word, the income degree of people is high it is means the employment rate of the state is high. Therefore, the buying power of occupant will be increase and they have the ability to purchase a belongings. By the manner, when a personal income grows, it can do the occupant to alter to larger place or purchase a new house. In decision, if income degree addition, criterion of life will increase therefore the demand for lodging including flat and condominium besides will increase.
Harmonizing to Graham MacDonald, ( 2009 ) , population is a factor that will impact the supply and demand of lodging. When the population additions, demand for populating infinite and new building besides will increases, and it will driving up place monetary values and perchance building costs and therefore will impact the overall value of residential existent estate belongings.
Property Market Analysis Tools
Multiple Regression Analysis ( MRA )
Multiple Regression Analysis is a technique used to set up the relationship between quantifiable variables in which information on dependant and independent variables is plotted on a spread graph and tendencies are indicated through a lone of best fir, utilizing two or more independent variables. In other word, multiple arrested development analysis is used to prove the effects of independent ( forecaster ) variables on a individual dependant ( standard ) variable ( Dan Fisher, 2005 ) . Multiple arrested development analysis can utilize in existent estate belongings where it can foretell the value of dependent variable such as market value or monetary value of belongings, and knows the value of independent variables such as batch size, age of edifice, term of office, figure of suites and other internal and external variables. Besides that, this statistical technique besides can research the relationship of dependant and independent variables. The chief intent of multiple arrested development analysis is use to prediction and causal analysis. The end for prediction is to develop a expression to supply a good estimation of those future values in both the short-run and long-run period. A multiple arrested development equation for foretelling a dependant variable ( Y ) can be expressed as:
Y = a + b1x1 + b2x2 +aˆ¦bnxn
Y= dependant variable
b= arrested development
x= independent variable
Multiple arrested development analysis is of import in executing uniformity and consistence in existent estate assessment as it does accommodations for outstanding features in the market based on the latest data dealing.
After the theoretical account has been developed, this survey will go on with the statistical trial to prove the truth of the theoretical account and the relationship between the dependant and independent variables. The statistical trial will be utilizations in this survey are R, adjusted R, F-Test, T-test and multicollinearity.
Adjusted R Square ( R
R Square ( R besides called as the multiple correlativities or the coefficient of multiple findings. It is as the ratio of the amount of squares, it besides present the nowadays of the discrepancy for the dependant variable explained unambiguously or jointly by the independent variables. The map of this trial is to prove the truth of the relationship between dependant and independent variables in signifier of value scope of 0 % and 100 % . ( R is same with other signifier of correlativity, it is sensitive to restricted discrepancy ( Achen, 1985 ) . The higher the ( Rindicates the higher truth and better explainable of the theoretical account. Normally, the scope valur of ( Ris ever 0 between 1.
Adjusted ( R is an accommodation for the consequence that when 1 has big figure of mugwumps. ( R will be ever being 1.0 at the utmost degree, and there are as many mugwumps variables at instances in the sample. The value of the adjusted ( R should be more than 0.80 ( 80 % ) and it can see to be a good additive theoretical account.
The map of F-Test is used to prove the significance of R, which is the same as proving the significance of ( R. F-statistic is amount of the average square arrested development and average square remainder. When the bigger of F value, it is means that the theoretical account is high truth. The scope of the value can be range from 0 to big figure. When the F value less than.05, the theoretical account is considered significantly better than would be expected by opportunity and it can reject the void hypothesis of no additive relationship of dependant and independent.
The independent t-test besides named as two sample t-test is an illative statistical trial that determines whether there is a statistically important difference between the dependant and independent variables. T-test besides uses to find hypothesis whether to go on transport out or terminal of the survey. If the hypotheses of the trial stopping point with aim it will be accepted. The void hypothesis ( H0 ) is accepted when the variables are non important at 0.05 degree ( p & gt ; 0.05 ) . In other word, the significant-t must be less than 0.05 ( P & lt ; 0.05 ) to reject the void hypothesis.
Multicollinearity is explicating the additive relationship of the independent variables. The relation is organizing of positive or negative value such as -1 and +1. Coefficient of +1 is perfect positive correlativity or no perfect collinearity while coeeficient of -1 is perfect negative correlativity ( Tabachnick, Barbara G. and Linda S. Fidell, 2001 ) . The alteration in independent variable will do the alteration of dependent variable. If the consequence is close to 0, it is average the relation between the variable is non important. Scatter secret plan in SPSS is used to find a relationship exists between two variables. From the diagram, it can place the relationship and the way of variables.
The beginning of Likert Scaling is come from Dr. Rensis Likert, which is a sociologist at the University of Michigan, who developed the technique. A Likert graduated table is a type of psychometric response graduated table frequently used in questionnaire and is the most widely used graduated table in study research. When respondent replying to a Likert questionnaire, they will stipulate their degree of understanding to a statement ( Likert, 1932 ) . Traditionally, a five -point graduated table ever will utilize in questionnaire such as:
Neither agree nor disagree
After the questionnaire is completed, each inquiry in questionnaire may be analyzed individually or item responses may be summed to make a mark for a group of inquiries. Hence, Likert graduated tables are frequently called summational graduated tables.