How is the MRT Project Going to Affect the Overall Property Market?

by Mr. Wan Choy Heng Resident Manager / Registered Estate Agent

The construction of the much anticipated Klang Valley Mass Rapid Transit (MRT) has finally started. Described as the single most expensive infra structure project ever in this country, the MRT project which consist of 3 lines cutting across the entire Klang Valley or The Greater KL, is estimated to cost about RM36.6 billions to build, excluding land cost and rolling stocks.

The first line of the MRT project runs from Sungai Buloh to Kajang (SBK Line) stretches about 51 km with 31 stations is expected to be completed by 2017. Once completed and fully integrated with the existing KTM, LRT, Monorail, KL Rapid bus and the respective feeder bus services, the MRT will have tremendous positive impacts on the value of property located along its route and in the vicinity of its stations, with the exception of a few negative attributes.

A senior local property consultant from an established property firm here, who is also a member of the Board of Valuers, Appraisals and Estate Agents, Malaysia recently said that value of property along the MRT route will appreciate 15% to 25% depending on the location to the stations. While I’m but sure about the quantum of the appreciation, I’m certainly concur that the appreciation of value for property located in the vicinity of MRT route and its stations is certain to happen. This has happened to LRT Putra Line and Star Line extensions which construction is underway now. LRT Putra Line extension starts from Kelana jaya, passing through Subang Jaya, UEP Subang Jaya and ends at Putra Heights. Whilst LRT Star Line extends from Sri Petaling, passing through Bandar Kinrara, Puchong Jaya, Bandar Puteri and finally also ends at Putra Heights. 

Since its announcement in 2009, and with construction underway the property value along these 2 extension routes has appreciated tremendously. A basic double storey link house of 20’ x 60’ at USJ 6 was selling in the region of RM250k back in 2009 is now selling between RM400k to RM450k. A basic 3-bedroom apartment of about 900 sqft at Rhythm Avenue USJ19 was selling in the region of RM200k in 2009 is now selling between RM300k to RM330k. Both of these locations mentioned have a proposed LRT station, currently under construction, located within walking distance. Similar patterns of property value appreciation has also been reported at Bandar Kinrara and Puchong Jaya where proposed LRT stations for Star Line extension are to be constructed. Though the appreciation of property value at these areas mentioned is not entirely due to the coming of LRT extension, it is undoubtedly clear that the announcement of the final approval and the eventual sight of physical construction works of the proposed LRT extensions at these areas have inevitably led to the increase demand for property at these areas, hence this pushed up the property price. The construction of LRT extensions at these areas have brought about better accessibility to these locations, making property at these locations become more accessible and appealing to a bigger market, unlocking the value potential of property in these locations.

Running up to 2017 before the MRT-SBK Line is completed, more property developers will be planning high density residential developments along the MRT route. Projects which are strategically located near MRT stations will likely to enjoy good sell-out as buyers are confident of future demand for their property once the MRT is in operation. Proximity of any proposed condominium development in relation to a MRT station has been a major winning factor these days. New launches which are strategically located near to a MRT station will be expected to be priced at least 10% higher than others which are located further away. Residential developments within walking distance to MRT stations will undoubtedly benefit the most as the demand for rental units at these areas will be guaranteed. Most working class commuters would like to have their rental housing within walking distance to MRT stations as first priority. 

Comes 2017 when the MRT-SBK Line is finally completed, the commercial property in the vicinity of MRT stations will be in great demand. The huge number of passengers using MRT will give rise to plenty of new business opportunities of all kinds in the vicinity of MRT stations. This has proven true in Singapore, Hong Kong and Taiwan. Commercial and retail premises which are located near MRT stations at these countries enjoy good occupancy rates and high rental. The same scenario will likely to repeat here in KL.