KK Goh shares how transportation infrastructure helps improve a city’s performance and in particular why the MRT 1 is a game changer for Klang Valley’s economic landscape.
How does rail infrastructure add value to an area/locality?
Rail infrastructure is critical to support a city’s continuous growth, it functions to transport the masses to and fro metropolitan areas and the connecting suburbs. In many countries, a rail system that is up to speed is the holy grail for its citizens; as it makes it possible for millions to work in the city centre while living out in more family-conducive and financial-friendly neighbourhoods.
Take Singapore for example, this tiny republic which is smaller than Penang Island is able to evade traffic congestion issues and maintain a high quality of living for its residents mainly because of the efficient MRT network in place. Public transportation penetration exceeds 80% and very few Singaporeans actually drive, most will hop onto the MRT to commute from one place to another.
An efficient transportation system goes hand in hand with economic prosperity; it contributes towards employee productivity, saves time and cost and is energy and environmentally-friendly, among many. You have to wonder, how much did the MRT influence Singapore’s growth and is it any wonder that Singapore is now the financial hub of ASEAN?
Meanwhile, Malaysia’s own MRT Sungai Buloh-Kajang which was fully operational by mid-July 2017 is slowly proving its ‘magic-wand’ effect in changing KLites lives for the better:
How important is rail infrastructure for property investors and home buyers?
Property purchasing for investors boils down to the ease of securing tenants. What is the top requirement among renters? Besides affordability, it’s ease of commute. Single KLites or young couples working in the city would prefer to stay near an LRT/MRT station.
Based on my personal experience in property investment in Singapore, demand is high and tenant turnover rates are minimal for properties located nearby MRT stations. A growing number of urbanites are willing to pay a higher rent for strategically located units and save instead on the petrol, time and hassle involved for a longer commute. The main priority for Gen-Ys especially is convenience and work-life balance; they are no longer willing to waste hours of unproductive time on the road daily. Many even forgo purchasing a car, it is a matter of opportunity cost after all. Not forgetting, a car is a depreciating asset.
This demand trend should be replicated for properties along any other MRT line, the MRT 1 included; providing of course investors ask for reasonable monthly rents. A quality property unit will enjoy healthy capital appreciation too as improved transportation links lead to long term land value increases and commercial activity stimulation within the locality.
What are your tips for investors who are looking to purchase properties surrounding the new and upcoming (MRT 2 &3) stations?
At the risk of sounding like a broken record, investors must do their due diligence. Do not take for granted that location is all that matters; research and ground work is also imperative in ensuring you are not being shortchanged. Also, make sure to cross check with similar transactions by logging onto brickz.my, which provides up-to-date actual property transaction prices.
A point to note however, properties around the MRT Line 1 stations would have already factored in its convenience factor into their selling prices. Hence, if you manage to find a reasonably-priced or below-market value property, do not hesitate to make it yours. Investors would have a higher chance securing units along the future MRT 2 & 3 lines though, start ‘fishing’ for units by scoping out which developers will be building along these routes. Pay special attention to TOD projects, as these will generate high demand.
“A growing number of urbanites are willing to pay higher rent for strategically-located units and save instead on the petrol, time and hassle involved for a longer commute.”
How do you think the subsequent MRT lines (Line 2 & 3) could be improved on to enable maximum positive spill-over effects for the local community and the country’s economy?
Inter-connectivity between the MRT lines with other rail nodes within Klang Valley/Greater Klang Valley must be integrated effectively. Switching between rail lines must be a smooth, safe and comfortable affair. This means all the supporting components such as covered walkways, escalators, proper lighting, etc must be in place.The purpose of public transportation – to provide affordable and easy commute must be met.
More importantly, consistency and regular maintenance must not be sidelined; train frequency should be kept at optimal levels, rail schedules must be followed and regular feeder buses at each station.
Only then would the community fully utilize the MRT and reap the positive benefits in turn. If our rail service is not up to par, it does not make a difference if your property is fronting an MRT station or not; it will no longer be a selling point for tenants, most will prefer to travel to work by car or ride-hall services such as UBER or GRAB anyway. Furthermore, an efficient rail network will also serve as a catalyst for the tourism industry; tourists are growing savvier and many will research beforehand to determine the convenience and affordability factor of travelling between places of interest.
Meanwhile, a well-established rail network will attract ‘repeat customers’ – Malaysia is already blessed with its tropical climate, delicious fare and rich history. A world-class public transportation system acts as the dash of spice which transforms a dish from ‘just tasty’ to mind-blowing.