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Neighborhood preferences of house buyers: the case of klang valley, malaysia

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  • Tan, teck hong

Abstract

This paper attempts to examine the impacts of neighborhood types, as defined by a gated-guarded neighborhood with landscape compound and a freehold tenure neighborhood on residential property values in Klang Valley, Malaysia. A weighted least squares method together with a heteroscedasticity consistent covariance matrix estimator is used to estimate the coefficients of structural, locational, and neighborhood attributes of dwellings on house prices. Results show the gated-guarded neighborhood with landscape compound could increase residential property values by 18.1%. Additionally, the positive perception of a freehold property in the neighborhood could induce a price premium of 23.7%. It is reasonable to believe that neighborhood types play a role in determining residential property values. In order to meet the increasingly affluent and discerning house buyers, developers instead of just offering dream homes in prime locations, they should provide intangible benefits in the neighborhood that just as sought after by today’s house buyers, such as a sense of security in the landscape compound, a feeling of harmony with one’s surroundings, and an infrastructure which supports the lifestyle of house buyers.

Suggested Citation

  • Tan, teck hong, 2011. "Neighborhood preferences of house buyers: the case of klang valley, malaysia," MPRA Paper 30420, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:30420
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    File URL: https://mpra.ub.uni-muenchen.de/30420/2/MPRA_paper_30420.pdf
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    References listed on IDEAS

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    1. Margot Lutzenhiser & Noelwah R. Netusil, 2001. "The Effect Of Open Spaces On A Home'S Sale Price," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 291-298, July.
    2. DiPasquale, Denise & Glaeser, Edward L., 1999. "Incentives and Social Capital: Are Homeowners Better Citizens?," Journal of Urban Economics, Elsevier, vol. 45(2), pages 354-384, March.
    3. Mok, Henry M K & Chan, Patrick P K & Cho, Yiu-sun, 1995. "A Hedonic Price Model for Private Properties in Hong Kong," The Journal of Real Estate Finance and Economics, Springer, vol. 10(1), pages 37-48, January.
    4. Mats Wilhelmsson, 2000. "The Impact of Traffic Noise on the Values of Single-family Houses," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 43(6), pages 799-815.
    5. Tyrvainen, Liisa & Miettinen, Antti, 2000. "Property Prices and Urban Forest Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 205-223, March.
    6. Ben C. Arimah, 1992. "An Empirical Analysis of the Demand for Housing Attributes in a Third World City," Land Economics, University of Wisconsin Press, vol. 68(4), pages 366-379.
    7. Seppo Laakso & Heikki A. Loikkanen, 1995. "Finnish Homes-Through Passages or Traps?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 475-495.
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    More about this item

    Keywords

    Neighborhood types; Property prices; Klang Valley; Malaysia;

    JEL classification:

    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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