DO infrastructure projects like the Mass Rapid Transit (MRT) really boost property prices? Sometimes it does, and sometimes it does not. It depends on a number of factors, according to property consultants.
When the MRT project was first announced, there was a general euphoria (with pockets of dissenting views) about the project. There was also an overall anticipation that property prices will get a big boost.
To a large extent, that has been true, although not chiefly because of the MRT factor. There are other factors like the cost of buildings materials and construction, among others, that have contributed to the rise in property prices the last couple of years.
But that premise aside that the MRT project boost prices there are also properties which have been adversely affected by the rail transportation construction and these can be seen in some areas today.
Before going further, one fact need to be established. There is a need for public transportation to improve if Greater Kuala Lumpur is to progress further. This public infrastructure will contribute to the liveability of Greater Kuala Lumpur.
But while there is a need for a well integrated public transportation system, it would be simplistic to, with one stroke, pronounce that the MRT will help boost property prices.
Because what is happening today is, during this current period of the MRT construction, there are certain properties that have become less desirable because they are directly affected by the MRT project. And these property owners have found themselves up against a wall, literally.
What is happening to them may be repeated in other locations along the 52km Sg Buloh-Kajang MRT line that is currently being constructed. And very likely, it will be repeated in the next two subsequent lines that will be constructed, if all the plans are to go ahead as scheduled.
An informal poll among property agents and a transport consultant was carried out which threw up differing schools of thoughts. It is impossible to write about this without going into specifics how many affected houses, exactly which house is facing what, and what's best thing to do in this predicament.
The specifics
As one drives from Bandar Utama heading towards Taman Tun Dr Ismail (TTDI), Kuala Lumpur on the Lebuhraya Damansara-Puchong (LDP), one will see that the MRT construction has started at Jalan Pinggir Zaaba, TTDI. Mudajaya Corp Bhd is the contractor for that stretch.
From here, the line connects to the Sprint and heads towards Damansara Heights. Before coming to the junction that leads to Bangsar, there is a row of shops housing Victoria Station and OCBC Bank on the left. Pillars have been erected close to the houses backing the Sprint. There are about 150 houses on Jalan Kasah from end to end including 36 of them located on two cul-de-sacs. Sunway Construction is the contractor for that stretch.
Already, houses in both locations have been put up for sale. One may say, houses are being put on sale all the time. But what the agents and owners are experiencing today is a drop in demand and prices.
A few agents who declined to be named say the value of properties directly affected have dropped between 20% and 30%. Previously, the price of the double-storey linked houses were priced between RM1.2mil and RM1.3mil.
Today, an owner is trying to sell his double-storey terrace unit at RM1mil negotiable, and another at RM950,000. There are no takers.
The MRT viaduct that the train runs on is expected to cover half of the two-lane road in one section of the road fronting about 20 houses. The MRT viaduct will be between 15m and 20m high from the ground, which is higher than the houses there. At the closest point, the viaduct will be 14.5m away from one of the properties, according to drawings submitted by a group of owners to City Hall.
Says an agent who declined to be named and who specialises in that location: “It is best that certain parts of Jalan Pinggir Zaaba stretch be converted into commercial zone. If this is done, the value of the properties there will increase and it is up to the owners if they want to continue to stay, or to sell out,” says an agent.
A transport consultant who requested anonymity feels the same. “The owners now know how close the pillars will be. Potential buyers can see that for themselves. Why would they buy those properties unless they are buying it cheap in order to rent it out?”
He says there was a situation in Taman Mega Mas, Petaling Jaya which involves a pass-through tunnel linking Ara Damansara with Taman Mayang. It was no longer environmentally conducive to be a residential area because of the high traffic volume. But “in order for an area to successfully be converted into a commercial area, everyone in that affected area must agree to it. Those who are not too adversely affected may protest. Once an area is commercially zoned, there will be commercial traffic, which makes it inconducive for those who may want to stay,” he says.
“Jalan Pinggir Zaaba lends itself to be a commercial area, but not an overly busy one. There will be a certain amount of parking space below the viaducts and accessibility can be improved. This is a viable option for the affected properties but the owners along that stretch will need to be united about this and it is up to the authorities concerned.
“However, Jalan Kasah, Medan Damansara does not have the same advantage as TTDI's Jalan Pinggir Zaaba as the properties there do not have good strategic frontage or access, or space,” the consultant says.
He gave an example of an area in Jalan Pudu, Kuala Lumpur near the Gerakan headquarters where the semi-detached houses were converted to showrooms and other commercial use as the area was no longer viable nor conducive as a residential area.
The opposing view
However, there is another school of thought about the switch from residential to commercial use. Fernstate Sdn Bhd (real estate) senior manager Shawn Fernandez feels differently. His office his located in Jalan Setiapuspa, Medan Damansara in the same block as Victoria Station, which fronts the Sprint Highway.
Fernandez says landed properties will not be terribly affected in the longer term although there will be fall in demand and prices in the short immediate term. Converting residential to commercial use when it involves the MRT project will set a precedent and this will be a mistake. Also, there will not be sufficient parking space for the Jalan Kasah area.
“My suggestion would be for owners to sit out the construction period,” he says. Fernandez says the line will take three to four years to complete. Cost of construction and labour will only go up and so will the affected landed units in time to come.
“When the train is up and running, over the longer term, the convenience will have some form of value. We are seeing that in Brickfields today. When KL Sentral was being constructed, there was much concern about property owners.”
But the specifics are important, says Fernandez. If a house is next to a station, the value of the property will be affected, while the next one a few rows away will command a better value, Fernandez says.
He says there are owners who want to sell out and there are those who are taking a wait-and-see attitude in Jalan Kasah today.
There are two things facing property owners there the retaining wall and the alignment. All the 150 houses, from end to end of Jalan Kasah will be affected, he says.
It is which house, to what degree, because once the line is operational, the row backing the Sprint will be affected.
The train, he says, will run in the middle of the Sprint. That means all the houses backing the Sprint will be affected so it is wrong for the people staying there now to say they are not affected.
Says Fernandez: “It is difficult to assume what will happen to these houses until we know details about the wall that is being constructed today how high will it be, the type of retaining wall that will be built and other details.”
Acknowledging that he is a lay person when it comes to engineering, he says a wall with two layers of bricks and a space in between will reduce noise level better than a wall with one layer of bricks. A wall higher than the roof top will serve as a noise buffer better than a low wall.
Explaining further, Fernandez says a wall with protrusions facing the highway will be able deflect sound waves better than “a straight wall” with no protrusions. If the wall can be made aesthetically pleasing, that will help. He doubts residents know these details.
“It is important to engage the people who have been affected. If the retaining wall can be made aesthetically pleasing and serves its purpose to reduce noise and vibration levels, if the Government (or the companies involved) can make contributions to double-glaze windows to further enhance the liveability of their properties, owners may be happier.
“It is when there is inadequate engagement and scarce information with little details, that gives rise to situation we have today in the affected areas,” says Fernandez.
A retaining wall, not MRT viaduct
In response to a letter from a reader, Mass Rapid Transportation Corp Sdn Bhd CEO Datuk Azhar Abdul Hamid earlier this week wrote that “what is being built now is a retaining wall and not the MRT viaduct.” (Retaining wall, not MRT Viaduct, being built, April 3, 2013)
“With the retaining wall, a new slow lane for the Kuala Lumpur-bound side of the Sprint Highway can be created. This new lane will compensate for the fast lane of the highway which is being taken for the MRT viaduct. The MRT, therefore, will run in the middle of the Sprint Highway and not metres behind the houses along Jalan Kasah.” - The Star
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