Assessing the relative importance of structural and locational effects on residential property values in Metropolitan Kuala Lumpur

Abstract

This paper assesses the relative importance of structural and locational attributes on residential property values in Metropolitan Kuala Lumpur. A computer-intensive algorithm known as LMG method was used in the analysis. Results suggest that Metropolitan Kuala Lumpur property values are mainly determined by the structural attributes which explain 62% of price variations, and the locational attributes explain only 17%. Results further suggest that floor area, two or more storeys, property types, property with freehold status, lot size, greater number of bedrooms, and two locational attributes i.e. closeness to city centre and closeness to forest are the most important variables affecting property values. The result of this analysis offers deeper understanding on how structural and locational attributes interact with property values in an urban setting, and could further increase the degree of objectivity of the professional valuer’s in the predictive model.