Ask Malaysians about what they is important when it comes to investing in properties, and they will usually answer with one or more of the below –
- Wait, did I say location?
Due to the nature of my work, I do get inundated with emails every day from my readers (I run a fairly popular blog on Malaysia property), and the most frequently asked question has got to be this: “Khai Yin, where is the latest property hot spot?”
My answer is as good as anyone else’s, but I do see a growing trend of integrated (or “mixed use”) developments in the Klang Valley, and if I’m willing to bet my daughters’ college funds on property investment then I will be investing in those. (Addendum: more on area prospecting can be found in this guide).
Now let’s face it – with the worsening of traffic jam situation in urban Klang Valley, commuting to work is fast becoming untenable. Most of us would prefer to live near convenience and the people that we love.
We have seen a couple of fairly recent launches where “everything under one roof” is a strong selling point (the recently relaunched Main Place in USJ, Kiara East on Jalan Ipoh), and we can expect these projects to do well. And we shall see more integrated developments in the pipeline (with even more such projects in the city announced recently – such as 8 Conlay), and this trend is a consequence of how un-livable the Klang Valley has become.
Especially for condominiums in the urban areas, walkability is fast becoming a crucial factor for many investors when it comes to choosing the right property to invest in. In fact, our internal measurements have shown that there is a fairly strong correlation between a property’s walkability score and its capital yield which means that we can use walkability as a fairly accurate future price predictor. More on this later.
What Is Walkability?
To put it simply, walkability is a measure of how friendly an area is to walking. In the context of a specific property, its walkability is measured by how accessible important amenities such as schools, transportation points, retail outlets, restaurants and police stations are given its location.
Walkability can be influenced by the following factors:-
- Distance from the property to the amenity
- Availability (and quality) of footpaths
- Traffic conditions
- Air conditions
- Ample street signs and directions
- Average pedestrian density
How Walkability Is Measured
There is no one standard way to measure walkability.
In the United Kingdom, there are “walking audits” where auditors would assess a pedestrian route qualitatively and quantitatively, utilizing a geographic information system (GIS) package to track results. These walking audits can be rather elaborate, and involves the scoring of street facilities such as links, crossings, waiting areas (bus stops, taxi stands) and open spaces (parks and fields). Each of these facilities is then scored on a seven point scale.
What is interesting with these scores from walking audits is that they are found to correlate well with the increase in residential house prices. This is often cited as proof that there are clear financial benefits from better street and walkway designs, and this is the reality that the property developers in Malaysia are waking up to.
Companies like Walk Score uses computer algorithms to calculate an index based on distances to important amenities. Apart from walkability, Walk Score also computes “Transit Score” and “Bike Score”. It’s a very innovative company.
- Basic amenities (Clinics, schools, police stations)
- Secondary amenities (Restaurants, drinking spots, retail outlets, laundrettes, entertainment spots)
- Transportation points (Taxi stands, LRT & commuter train stations)
Apart from the walking distance, the “ease of walk” (meaning, the existence of pathways and walking lanes) is also a strong factor. Datasets for these two variables are collected by connecting to the freely available Google Maps API.
The GWS scores range from 0 (worst) to 100 (best). As there are new amenities and walking pathways being built all the time, the scores won’t stay constant.
We do what we call the “Crawl And Compute (CAC)” process once about every six months and repopulate our index with new scores. Of course, the accuracy of our data depends on Google Maps, which is obtained via crowdsourcing. For the latest scores on selected properties in the Klang Valley, please contact me.
Some Sample Walkability Analysis
The charts below show a sample of GoodPlace Walkability Scores for condominiums in Mont Kiara and the Kuala Lumpur City Centre (KLCC).
It should be of no surprise to anyone that the condominiums that score well on the walkability chart are part of mixed use developments, or are situated on top of a shopping mall.
Also, for many of the condominiums inside the KLCC enclave, commercial areas, shopping malls (Suria KLCC, Avenue K, Ampang Point), and public transportation points are reachable by foot. Thus, the KLCC condominiums often score high on the walkability chart.
Mont Kiara, on the other hand is a mixed bag of sorts. Some centrally located condominiums and apartments (such as the “original” cluster of Sunrise-built condominiums which line up Jalan Kiara 1) have superior accessibility to schools (Mont Kiara International School), offices (Wisma Mont Kiara, Plaza Mont Kiara), a police station (next to the i-Zen condominiums) and retail outlets (One Mont Kiara and Solaris Mont Kiara).
There are also “far flung” condominiums up north on Jalan Dutamas Raya (which are still being marketed as being part of the Mont Kiara enclave) which score below their central Mont Kiara counterparts due to its relatively poorer walkability factor. The same goes for the Kiaramas condominiums in the western side of Mont Kiara, although schools (like the Garden International School), a police station, One Mont Kiara and Plaza Mont Kiara are still somewhat reachable by foot (for the motivated walker!).
We have also noticed that residential-only enclaves seem to score in the lower side of the spectrum. Case in point: USJ Heights score in the [40-50] bracket where the nearest commercial area is USJ Taipan which is 5km away – it’s not very walkable!
Correlation Between Walkability And Price Increase
First of all, here’s a disclaimer. As we accumulate data from various publicly available sources, our analysis is only as good as the sources that we use. We cannot verify the accuracy of our data sources which is out of our control.
Our measurements department has done a rough correlation analysis between a property’s Walkability Score and the price appreciation for the past one year. Below is a chart showing how selected clusters of properties in KLCC and Mont Kiara performed in terms of capital yield and walkability:-
The results within this limited dataset are directionally conclusive, and may give us a capability to predict the degree of future price increases (when combined with other variables such as external macroeconomic factors, future development of infrastructure, and supply-demand economics).
Interestingly, the Commission for Architecture and Built Environment (CABE) has independently established the correlation between the increase in walkability scores and residential housing prices in the United Kingdom in a landmark study done in 2007 (“Paved In Gold: The Real Value Of Good Street Design”, published by CABE). We will share more findings in our ongoing study on yield vs walkability in future articles here on GoodPlace.my.
The Walkability Advantage
Property developers seem to be more mindful about the walkability factor now, and this is reflected in the trend of planned townships and integrated developments.
Indeed, there is relatively a stronger emphasis now on the design of an environment which encourages cluster-like living and increased social interaction while reducing carbon footprint. Superior liveability often results in the economic benefits which then trickle up to overall property price increases as demand for the properties in the area increase.
Here’s a fun anecdote: Dan Buettner, a fellow at the National Geographic Society who researched about the happiest place on earth, said that “there’s two things that we all hate doing. The first thing is housework. The second thing is the daily commute in our cars. So, to be happier, move closer to your work place!”
What’s In It For You
If you haven’t done so already, start considering walkability as a factor when you are considering the purchase a particular piece of property. I do share walkability scores here at GoodPlace.my from time to time, and get in touch with me if you’d like a walkability score of the property that you are considering. Leave me a message below, or use our DealMatcher service.
Even if you do not have access to the Walkability Scores, you can do a qualitative evaluation yourself by visiting the property and looking out for the nearby amenities, existing (and planned) pathways, etc. Keep a scorecard so that you can compare between the properties that you are considering, and with enough comparisons, you’ll be able to separate out the winners and the duds as far as walkability is concerned.