How To Spot The Next Property Goldmine With Infrastructure Analysis

Siti @GoodPlace

Shortly after I published a series of guides on area prospecting over the last couple of weeks (if you have missed them, check out these links: Is This Place Going To Be Hot (Part 1), Part 2, The Spillover Principle and How To Exploit Property Portals To Locate Boom Areas), the Mentor had sent me a quick succession of messages over Whatsapp.

Richard Whatsapp Chat

Indeed, if you have read all the guides that I have previously published, I have only briefly talked about infrastructure as one of the drivers of growth, preferring stuff like incoming supply and population growth in order to forecast the “hotness” of an area.

I’m taking a contrarian view here and many won’t agree with what I’m going to say here, but a too “macro” view of things is often useless to the lay home buyer. Indeed, despite what gurus or the mainstream media want you to believe, most of the esoteric stuff you hear about the “economy” or “hot money flow” or “fiscal cliff” is as irrelevant as, say, the fifth Beatle.

Just to illustrate: the end of quantitative easing in the US this coming October is not going to affect the sub sale prices of a condo in Kelana Jaya that much. On the other hand, new projects in the area and the inflow or outflow of human traffic would.

Nevertheless, I do agree with my Mentor that infrastructure should come first before looking at spillover – since historically (in Malaysia at least) housing has typically emerged and flourished around transport infrastructure (first, around the rivers during Hang Tuah’s time, and then along the rail and roads since Merdeka). And now, LRT and MRT extensions have the biggest impact on properties which are built near the transit stations.

Effect Of LRT/MRT Developments On Property Prices

An investor friend of mine Mun (you might have read about her here) have hinted to me that she would get maps of upcoming infrastructure projects (don’t ask from where) and get her team to comb through the plans to identify low hanging fruits where easy moolah can be made. I called her up yesterday and she gave me this pro-tip:-

Khai Yin, look for existing properties where the LRT station is getting built. Not new projects, but existing properties. For a couple of years, the prices will either be flat or even dip because of the noise, dirt and inconvenience. But when the station is built, the prices will shoot up. No joke.”
M.

Take that advice for what you will, but it makes a lot of sense to me. But you’d better have some awesome staying power (money wise), because development of LRT lines takes many years, and given the great Malaysian tradition of over-promising and under-delivering when it comes to mega projects, build some contingency into your plans. 🙂

All you need to do now is do go get those new plans (for example, see here) and identify the areas near the stations that will benefit (typically 1km radius). No rocket science required.

To get you started, here’s a short list of planned rail extensions, highways and new stations as well as the related projects that (we think) are set to benefit. Enjoy, and let me know (in the blog comments below) if you want me to add anything else in the table below. 🙂

InfrastructureBeneficiaries
Sungai Buloh MRT stationD'Sara Sentral (Mah Sing)
Cochrane MRT stationSunway Velocity
Second Penang bridgeBatu Maung area (with spillover to Teluk Kumbar)
Sungai Buloh - Kajang (SBK) MRT lineCheras South, Bandar Tun Hussein Onn
Dataran Sunway station (SBK line)Sunway Nexis, spillover to Kota Damansara; possibly Tropicana Gardens
Kerinchi & Universiti stationsResonance (Eupe), South View (UOA), KL Gateway (Suez Domain)
Bandar Puteri Puchong MRT StationBandar Puteri, SetiaWalk, Bandar Puchong Utama
Sunway "BUS Rapid Transit" (BRT)Sunway South Quay
KL-SG High Speed Rail (HSR)Bandar Malaysia (starting point in KL).
MRT Line 2Putrajaya-Cyberjaya, Pandan, Sentul, Batu-Kepong

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

Comments

  1. Muniandi says:

    Hi Khai Yin.Congrats on your newborn baby boy.Enjoy the journey of life

  2. Hi Khai Yin,

    Superb, the above is one area I have been trying to figure out.
    Thanks.

  3. KY

    Great job. Thanks.

  4. Thanks Man.

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