Neighborhood preferences of house buyers: the case of klang valley, malaysia

This paper attempts to examine the impacts of neighborhood types, as defined by a gated-guarded neighborhood with landscape compound and a freehold tenure neighborhood on residential property values in Klang Valley, Malaysia. A weighted least squares method together with a heteroscedasticity consistent covariance matrix estimator is used to estimate the coefficients of structural, locational, and neighborhood attributes of dwellings on house prices. Results show the gated-guarded neighborhood with landscape compound could increase residential property values by 18.1%. Additionally, the positive perception of a freehold property in the neighborhood could induce a price premium of 23.7%. It is reasonable to believe that neighborhood types play a role in determining residential property values. In order to meet the increasingly affluent and discerning house buyers, developers instead of just offering dream homes in prime locations, they should provide intangible benefits in the neighborhood that just as sought after by today’s house buyers, such as a sense of security in the landscape compound, a feeling of harmony with one’s surroundings, and an infrastructure which supports the lifestyle of house buyers.