indepth

How significant are highways to property prices?

Investors take heed: “Follow the infrastructure to find the property hotspot” is no longer the only golden mantra for investing.

Key considerations must also be accorded to factors such as the project’s precise location, quality of master planning, availability of amenities, pricing and easy accessibility.

This is evident in a recent report on price trends of properties along three selected major highways in the Klang Valley by Raine & Horne International Zaki + Partners Sdn Bhd.

In the report, the property consultancy reviewed the properties located along the Kajang Dispersal Link Expressway (SILK), South Klang Valley Expressway (SKVE) and West Coast Expressway (WCE) in the past decade.

Among its findings, Raine & Horne International Zaki + Partners associate director James Tan shares that the WCE has effectively awakened Banting, unlocking its development potential. (Read more in WCE side story)

“WCE is well connected to several existing expressways. It is also an alternative to PLUS. The WCE will positively impact future land development, population growth and economic growth of the west coast of Selangor and Perak,” Tan added.

While most developments along the three highways saw positive growth, some did not fare well and Tan attributed this to the projects’ poor connectivity to the highway.

Read on for the price trends of properties along the three highways.

Kajang Dispersal Link Expressway (SILK)

The 37km Kajang Dispersal Link Expressway (SILK), also known as the Kajang SILK Highway, was built to disperse and regulate the traffic flow in Kajang.

It began operations in June 2004, connecting various major highways in the Klang Valley such as Sungai Besi Highway, Cheras-Kajang Highway, Kajang-Seremban Highway and the South Klang Valley Expressway.

Kajang SILK Highway is said to not only reduce travelling time between the north and south of Kajang but also to and from Kuala Lumpur, Cheras, Sungai Long, Balakong, Putrajaya, Semenyih, Bangi, KL International Airport as well as Seremban, hence enhancing the development of industries in these areas.

Raine & Horne International Zaki + Partners’ data show the price psf of major industrial developments along Kajang SILK Highway to be on a “stable uptrend” since its operation.

Some of the properties reviewed have gone up 50% between 2015 and 2020 despite an overall slow market amidst the Covid-19 pandemic.

Notable were the industrial lots at Kawasan Perusahaan Cheras Jaya in Cheras. They were priced at RM195 psf this year, up from RM130 psf in 2014 or a rise of about 50%.

Next to it is Kawasan Perusahaan Li Foong in Balakong where prices rose 35.7% from RM140 psf in 2015 to RM190 psf in 2020.

South Klang Valley Expressway (SKVE)

The three-phase South Klang Valley Expressway (SKVE) is in the southern part of the Klang Valley, Malaysia’s most densely populated region. The 51.7km dual-carriage way links bustling towns there, including the country’s administrative capital, Putrajaya.

It is the fifth east-west-oriented expressway in the Klang Valley – after the Federal Highway, the New Klang Valley Expressway (NKVE), the Kuala Lumpur-Kuala Selangor Expressway (LATAR) and the Shah Alam Expressway (KESAS).

The first 7.95km stretch (also known as section 1A) starts at the UNITEN interchange in Bangi and is toll- free. The second stretch – completed in June 2010 – links Cyberjaya and Bandar Saujana Putra.

The last stretch of the expressway is 18.81km long.  It transverses to Pulau Carey before ending at the Pulau Indah interchange, providing a direct link from Putrajaya to the Westports in Port Klang.

Construction of the SVKE started in 1998. Upon completion in 2013, it saw a growth of both housing and industrial developments in the area.

It is noteworthy that not many housing developments along the SVKE have done well. Raine & Horne International Zaki + Partners has found landed homes in Taman Lestari Permai, Seri Kembangan and Section 8 of Bandar Baru Bangi to suffer steep price dips of about 61% to RM132,000 and 42% to RM278,000. This was between 2015 and 2020.

However, Cyberjaya stood out positively in the study. For example, single- or double-storey terraced homes in Cyberjaya saw an average of 41% price growth to RM1.3 million over the last six years.

“The accessibility is one of the factors that influenced the price trend of residential properties along the expressway,” Tan explains.

Meanwhile, industrial property developments along SKVE also saw a strong price growth during the same period, with appreciations of 11.7% to as much as 60%. 

Tan expects many new projects to be coming up along SKVE. In addition, the country’s Growth Corridor Plans’ focus on four metropolitan growth corridors in the coming years will heighten housing and transportation needs besides creating job opportunities and business activities.

West Coast Expressway (WCE)

West Coast Expressway (WCE) is a build-operate-transfer privatisation project for the development of a 233km highway from Banting in Selangor to Taiping in Perak. The highway will cost about RM4.6 billion – of which RM3.6 billion is cost of construction.

Except for a 10km stretch from Section 7B which is expected to be ready by June 2024, the expressway is expected to be completed by end-2022.

According to the Raine & Horne International Zaki + Partners’ data, there are more than 10 terraced house developments along WCE. All of these have shown encouraging price appreciations of up to 155% in the last six years. 

Notably, a typical 2-storey terraced house in Bandar Mahkota, Banting, which cost RM180,000 in 2014, has jumped 155% to RM460,000 this year.

Similarly in Banting, 2-storey terraced houses in Bandar Seri Ehsan have risen 60% to RM320,000 from just RM200,000 in 2014.

Meanwhile, 2-storey terraced homes in Puncak Bestari located on the north of WCE have risen 47.7% to RM650,000 from RM440,000 in 2014.   

The WCE, Tan shares, has basically awakened Banting, unlocking its development potential.

“WCE is well connected to several existing expressways. It is also an alternative to PLUS. It will positively impact future land development, population growth and economic growth of the west coast of Selangor and Perak,” he added.

This story first appeared in the EdgeProp.my e-Pub on Dec 4, 2020. You can access back issues here.

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