The first chapter has discussed the issue sing this peculiar survey in footings of the aims, range of survey, and significance of survey, methodological analysis of survey and chapter lineation. In this 2nd chapter, the treatment will be chiefly on the theoretical facet of the planning and development in this survey. The account by literature reappraisal will be given in this chapter is as continuity to accomplish the aim.

The intent of literature reappraisal is to set up the microeconomic factor impacting residential belongings values. Furthermore, this chapter is besides traveling to discourse the planning and the market, be aftering system in Malaysia and districting definition.Apart from that, this chapter will besides look at the relationship between microeconomic factor and residential belongings value and the impact of planning and development towards residential belongings values.

The chapter start with discuss planning and the market and what is the factor impacting residential belongings value and underline theoretical on belongings value. The theories to accomplish the 2nd aim of this survey which is identify factor impacting residential belongings value based on planning and development. Decision of the determination will be given at the terminal of this chapter.

2.2 Planning and The Market

Harmonizing Peter Cowan ( 1973 ) , be aftering is defined as doing programs, schemes, reading, harmonizing to which be aftering screens about every facet of human personal businesss. Alternatively, Neutze ( 1987 ) suggests that planning of land usage helps to cut down the degree of improbableness about the signifier and degree of development that will be suited and allowable. It raises the supply of residential and to cut down the monetary value of land for development. The chief aim of planning is to apportion land utilizations to run into the economic and societal demands of people.

Mentioning to Lean and Goodall ( 1966 ) , be aftering and development are capable to alter in usage of form and accordingly in value. Social and economic alterations will consequence on belongings such as land and edifice values. Basically the form of land usage is a signal of competition for sites between assorted utilizations working through the forces of demand and supply. In an effort to vie for infinite at the pick location, some utilizations are displaced for other possible utilizations that willing to pay higher monetary values. In the same component, proprietors of belongings will take location will that offer the greatest advantage on monetary value.

Subsequent to Mayer and Somerville ( 1999 ) established a structural theoretical account depicting the relationship between be aftering ordinance and residential market supply. They considered two types of planning ordinances, viz. impose expressed fiscal costs on builders such as development or impact fees and those that delay or lengthen the development procedure. The theoretical account shows that in the absence of input monetary values for land, lodging starts are decently specified as a map of alterations in the degree of house monetary values, and non as a direct map of the degree itself.

Harmonizing Li and Brown ( 1980 ) tested the impacts of three types of vicinity factors such as aesthetic properties, pollution degrees and propinquity on lodging values. Li and Brown ( 1980 ) findings suggested that lodging monetary values rose due to handiness but fell due to jobs such as congestion, pollution or unsightliness.

Based on Monk & A ; Whitehead ( 1996 ) , be aftering bring impact on the belongings market by keeping the location and type of house therefore increasing belongings monetary value.

2.3 Planing system in Malaya

Planing activities chiefly fall into three wide classs such as forward planning, which chiefly involve the readying and updating of regional schemes, county construction programs, and local programs. Harmonizing to Bramley, Barlett, and Lambert ( 1995 ) , development control which involves local planning governments reacting to applications for the right to set about specific developments from land proprietors or developers execution, which involves direct industrial, commercial or lodging development by or affecting public governments.

As mentioned by Dale and Mclaughlin ( 1999 ) , there are two basic attacks to modulate how land is developed and used. This can be by manner of statute law using to all belongingss uniformly, or by manner of a license system in which a belongings proprietor must do application at the clip of a proposed development. Harmonizing to Sukuran and Ho ( 2008 ) , town planning system is chiefly a system of preventative control of assorted land uses forms where upon the controlling authorization would non let any blessing for development activity if inauspicious impact on environing environment were visualize.

Town and state planning has been called urban and regional planning, land usage planning, and metropolis planning or physical program in different states. Town planning is hence non mere layout programs of residential, industrial commercial or recreational activities, but a combination of constituents and elements which help to do the complete life, working and play environment which determines the quality of life its occupants. Above are town planning constructs and rules which have taken into consideration by a contriver in the readying for be aftering entry for belongings development in general and specifically in Malaysia.

Malayan town planning system consists of development programs and development control procedures that include consistent affairs for be aftering considerations ( Lee et al. , 1990 and Bruton, 2007 ) . The development programs under Malaysia ‘s Town and Country Planning Act,1976 consists of a Structure Plan prepared at province degree and Local programs prepare at local degrees The construction program consists of written statement preparation a State ‘s Policy and general proposals for the development usage of land in the State. The Structure Plan suggests way and attacks on how country in the States could be developed in an appropriate and sustainable mode.

Harmonizing to Tiesdel and Allmendinger ( 2005 ) , have been carried out which provide empirical grounds of the effects of land-use planning on lodging development in Malaysia. Empirical grounds of the effects are demand and supply activity, hazard and assurance, fiscal and information. However, those ascertained groundss did non sufficiently place the causes of town planning effects. It is necessary identified the causes of these effects so as to enable town contrivers and determination shapers to do the right pick to avoid unsought results. Planning is regarded as a mechanism for the authorities to exert its control on the urban development procedure. There are theories which advocate that land usage ordinances such as zoning and growing controls may impact belongings market by restraining supply and increasing demand.

2.4 Zoning Definition

Zoning is good known as a cardinal instrument in be aftering ordinance which is environmental ordinance in its broadest sense. It establishes the tone of vicinity and raises mean belongings values. Zoning is changed from agribusiness to another category this can intend a higher belongings value and more value for your investing. If the category is changed to argriculture so the belongings value may drop, doing you to lose money on your investing. Even be aftering systems without specific districting ordinances have contained elements of districting such as authorities description and limitations of rights over land within certain spacial bounds ( Willhelm, 1962 and Hagman, 1973 ) . In general, zoning has a double character such as delegating sole belongings rights and as a planning instrument which attenuates private belongings rights over the most valuable utilizations of land.

Zoning as a non-contractual duty imposed by town contrivers was lawfully introduced into Malaya by the Town Planning Act 1976. Zoning ordinances non merely find the type of usage, they besides regulate land and construction features such as batch size, set back and edifice tallness ( Pogdzinski and Sass, 1991 ) . It is of import for residential, commercial, agribusiness or even industrial country such as fabrication mill and natural stuff processing company to hold good connected and convenient substructure. This will ease transporting of goods, communicating or even going.

2.2.1 Types of Zoning

Zoning seeks to protect public wellness, safety and public assistance by modulating the usage of land and commanding the type, size and tallness of buildings.A Some ends of early districting codifications were to forestall overcrowding and bound incompatible utilizations. Mentioning to Raymond ( 2000 ) , the zoning helps the development countries to hold less environmental ailments and higher economic values. Harmonizing to Ed. Shirelle Phelps and Gale Cengage ( 2003 ) there are four different types of districting territories. The types included in an country will depend on the complexness of the township ‘s or county ‘s development job. Residential Zoning

Residential zoning may be established in several classs depending on the type of development already established or awaited. Factors that must be considered are denseness of population, bing and proposed streets and public-service corporations, assortment of lodging types and assortment of lodging monetary value groupings. Residential zoning can include individual household abodes, suburban homestead, or any figure of other appellation which screen places, flats, condominiums mosque, community centre and Parkss. Commercial Zoning

Commercial districting normally has several classs include office edifices, shopping centres, cabarets, hotels, certain warehouses, some flat composites every bit good as vacant land that has the potency for development into these types of edifices. The handiness of parking may impact the type of commercial zoning that is permitted. Industrial Zoning

Like commercial zoning, industrial zoning can be specific to the type of concern. Environmental factors including noise concerns normally are issues in finding into which industrial degree a concern falls. Manufacturing workss and many storage installations have industrial zoning. Certain concern such as airdromes may justify their ain appellation. Industrial zoning is frequently dependent upon the sum of batch coverage which is the land country covered by all edifices on a batch and edifice tallness. Industrial zone include fabricating mill such as visible radiation, medium and heavy mills Agricultural Zoning

Agricultural zoning is by and large used by communities that are concerned about keeping the economic viability of their agricultural industry. Agricultural districting typically limits the denseness of development and restricts non-farm utilizations of the land. In many agricultural districting regulations, the denseness is controlled by puting a big minimal batch size for a residential construction. Densities may change depending upon the type of agricultural operation. Agricultural zoning can protect farming communities from going fragmented by residential development

Mayer and Somerville ( 1999 ) , they concluded the land-use ordinance such as zoning and growing control has important effects on both of the new development and responsive of local supply to monetary value daze. This demoing there will be a monetary value different depending on types of zoning.

2.3 Factors impacting Residential Property Value

Property value is dependent upon many features associated with that belongings such as physical features of belongings such as location of the site in relation to employment Centres and other recreational installations. In add-on the societal and economic features of vicinity, including the presence of such comfortss as position, Parkss, schools and community services affect value.

Rosen ( 1974 ) explains that a belongings includes tonss of factors and these are wholly show in belongings monetary values. Buyers and Sellerss consider these factors individually before doing determination for the purchase and of the belongings. In order to understand the weighting for the different factors, hedonistic modeling was used to explicate how each factors made up the monetary values of the residential market.

Harmonizing to Malpezzi ( 2003 ) , the method of hedonistic modeling can used as computation in outgos on lodging. Hedonic can be mensurable on monetary values and measures so as to do possible opinion and anticipations of belongingss between indistinguishable and different residential in different countries. Sibel ( 2008 ) noted the consequences of the hedonistic theoretical account reveal that H2O system, pool, type of house, figure of suites, house size, locational feature and type of the edifice are the most important variables that affect the belongings monetary values.

In order to measure the impact of the planning system on the belongings market, Hui and Ho ( 2003 ) shows the theoretical account which investigate the consequence of the land-use planning system on house monetary values in Hong Kong. The theoretical account foremost determines the demand and supply equations to set up the market at equilibrium degree. Based on the research, the theoretical account analysed be aftering system variables such as useable floor country ( UFA ) , land supply ( LS ) , residential gross floor country under planning applications ( GA ) , residential zones ( RZ ) and green belt or unfastened infinite ( GB ) and blessing rate of planning applications ( AR ) relationship to house monetary values ( HP ) . Using bit-by-bit arrested development for a three-year period the consequence that the significance of blessing rate of the planning applications supports the position that development control maintain the construction of lodging supply in a manner which may alter the equilibrium monetary value of lodging. Tables 1 show parts of the literatures that identified properties act uponing belongings value.

Research workers


Joslin, 2005

Location, Age & A ; Size

Kauko, 2003

Location, Shopping Centers, Highway, Parks, Metro & A ; Neighbourhood features


GDP, Level of income, Migration, Construction Activity, Economics Activity & A ; Buying Power

Wong, Hui & A ; Seabrooke, 2003

Interest Rate

Case & A ; Shiller, 2003

Number of Employment

Han, Yu, Malone-Lee, & A ; Basuki, 2002

Land Area, Parks & A ; CBD

McCluskey, Deddis, Lamont & A ; Borst,2000



Change in revenue enhancement policy, Age composing of the population & A ; Rate of family formation

Meen & A ; Andrew, 1998

Income, existent involvement rates, Nominal involvement rates, General degree of monetary values, Household wealth, Demographic Variables, Tax construction & A ; Financial liberalisation

Cheshire & A ; Sheppard, 1998

Location, Level of income, Population, Transport, Policy & A ; Neighbourhood features

Lenk, Worzala & A ; Silva, 1997

Number of bathrooms, Number of sleeping rooms, Age of house, Lot size & A ; Basement country, Total country of house, Number of fire topographic point & A ; Number of auto garages Table 1: Main Factors Influencing Property Value

Beginning: Ge and Du, 2007

Few factors can impact residential belongings values such as substructure installations, locational factors, physical factors, legislative factors and demographic factors.

2.3.1 Infrastructure Facilities

Feasible and good substructure will be the basic foundation for development of lodging undertakings. Infrastructure installations include basic public comfortss including transit which will guarantee timely bringing of service and goods. Main comfortss such as electricity, telephone and H2O will impact the residential belongings value. ( Rosman,1988 ) . Comprehensive substructure will guarantee the value of the belongings. Missing this public installation could be construed as a mark of be aftering lack or even be aftering blight.

The theoretical account presented in Antunes et Al. ( 2009 ) assumes that the substructure web does non alter during the whole planning period. Yet, the topology of the transit web may hold a strong influence on the location determinations.

A survey of the influence of conveyance on house monetary values was examined by So et Al. ( 1997 ) noted that the major hazard of utilizing hedonistic monetary value arrested development is the presence of the multicollinearity between lodging properties and the resulting insecurity of estimations.

2.3.2 Location Factors

The factor of location is really of import in the finding of belongings values. Location is really alone as two next sites may command different values depending on implicit in factors of handiness, physical terrain, size and constellation etc.

Turner ( 1990 ) that the three most important influences on belongings value are

“ location, location and location ” . Royal LePage ( 2003 ) emphasises strongly on location and type of mortgage debt funding as chief factors impacting the market value of listed belongings. Location has a major influence in footings of propinquity to Centres of involvement, traffic congestion, offense degrees, degree of cleanliness or scenic beauty of the environment, substructure services and societal comfortss, security and planning Torahs. On the other manus, the type of mortgage can impact the belongings value either up or down depending on the sum, footings and conditions applicable, rates of involvements and method of refund.

Location theory stated that belongings value lessening when the location is situated far off from town centre. Whereas, belongings which are located within town centre are high in demand and the belongings value will increased. Nelson ( 1958 ) accent about higher belongings value exists in good locations. Town halfway countries activities such as economic system, societal and belongings market. Harmonizing to Khan ( 1977 ) stated that land situated near town centre have stiff competition use. The farther the location signifier town centres, the value of belongings will diminish due to low demand. ( Zulkifli. 1995 )

Kryvobokov ( 2007 ) modelled the belongings market of the most of import location attributes act uponing values in well-developed foreign existent estate markets and utilize this list in Ukraine. Using experimental grounds of developed belongings markets, the meta-analysis is applied to pull out location properties and weigh their importance. Result suggest that it is possible to confirm location properties, which influence market value for different existent estate types. Location factors influences on vicinity and entree appear to be ruling location. Surrounding Areas and vicinity Development

Harmonizing to Babcoak ( 1932 ) and Tan ( 1997 ) , the hereafter of residential belongings depends on the development planning in the country located. Surrounding countries developments are interconnected particularly in economic activities viz. Neighbourhood countries. For illustration, residential belongings which includes commercial industries will hold added advantages particularly in the belongings value.

Surrounding development refer to the activities within the vicinity countries which could give positive effects or negative effects to a peculiar belongings. For illustration, residential houses located nearby industrial countries will be affected by pollution, noises, congestion and heavy traffic. The value of the residential houses will be lower due to the deficiency of involvement of purchasers when such state of affairs occurs. ( Zulkifli, 1995 ) .

Rosiers et al. , ( 2000 ) noted that vicinity and entree factors influences between both series as to accomplish most choice theoretical account design with minimal information loss. Its purpose is to explicate belongings monetary values on the footing of physical and vicinity related features. Using hedonistic theoretical account on belongings information are located utilizing geodesic coordinates, which are integrated into MapInfo GIS. Assortment of informations such as schools, universities, colleges, shopping Centres, remote feeling images, street grids, route, main road webs and power lines are located utilizing relevant system. Consequences shows that theoretical account have greatly improved with location and entree factor influence in belongings values. It suggests that the factor analysis used is extremely efficient at screening entree and vicinity properties. The method provides utile nearing the lodging market.

2.3.3 Physical Factor

Physical factors refer to the physical features of a belongings. A physical feature is different in residential belongings with other belongings types. Differences in physical features of the residential belongings itself may do differences in value. Building Features

In footings of size and figure of suites were perceived as the most important factors act uponing the value of residential belongings. Following to these is the aesthetic entreaty include design, coatings, etc. It was surprising to observe that these facets were accorded high precedence over running and care costs and the age of edifice or obsolescence. This could be as a consequence of the reported hapless care civilization of most developing states ( ADB, 2005 ) .

Physical elements of belongings differ from physical elements of another belongings. Such difference could ensue towards the value of the belongings. Physical elements cover land size, floor country, location and type of belongings. ( Hamid, 2005 )

Mentioning to Creedy and Wall ( 1979 ) stated that size of tonss or edifices could act upon the value of belongings. The size of tonss or edifices has positive impacts on the value of belongings. The bigger floor country of residential houses the higher the value. In norm, bungalow tonss or houses are higher in value compared to teres houses due to bigger land and floor countries. Age and Condition of Repair

Changes in gustatory sensation and manner in new design houses tend to cut down the value of older houses. Besides, the status of fix must be considered as the cost of seting the belongings into a satisfactory province of fix now and the cost of care cost in future. Therefore, age and the status of fix are proved to be negatively related to belongings value. All else being equal, older houses have experienced greater depreciation ( Radriguez et al. , 1994 ; Raymond and Peter, 2000 ) .

2.3.4 Demographic Factors

Demographic factors are primary derives of the existent estate market. Demographic factors include population growing and income degrees. Population Growth

Refer to Tse and Webb ( 1999 ) the growing of urban population through migration and urbanization. Increase of population whether locally or migration of others will increase the economic sciences of an country. Such state of affairs will increase the residential belongings value when the demands exceed supply particularly in goods and services which will promote investors to take part actively in an country. Increase of population in an country will ensue in the demand for land.

When there is an addition of population in an country, the economic activities will increase in tandem with the demand ( De Wang, 1999 ) . Increased economic activities will ensue in the demand for residential belongings market. Current use of land will be converted into intensive land use. The alterations of intensive land use will increase the economic activities to be productive and resulted in the belongings market value to lift due to the addition of population. Income Levels

Harmonizing to ( Gallimore, Fletcher and Carter, 1996 ) families which have the same gustatory sensations and income tend to populate within the same country. Therefore the size of families, income, age, instruction degrees and the handiness and cost of mortage, financing have to be included in impacting the types of lodging and the values. High-income occupants will seek out a portion of metropolis that may offer leisure installations, Parkss, comfortss and the most convenient signifier of transit and substructure. This besides expose that the proximate and relevant influences on the belongings are related to the same influences runing on other belongingss in the vicinity.

Spatial segregation refers to the residential separation of sub-groups within a wider population which could be associated chiefly with racial groups, ethnicity, spiritual beliefs or income position ( Johnston et al. , 1983 ) .

2.3.5 Legislation Factors

Value of belongingss is determine by the importance of belongingss itself. A individual would be capable on purchasing belongingss chiefly is because topic is cognizant of the importance of belongingss to self. The right of belongings proprietor to be guarenteed with the enforcement of jurisprudence. However these rights are controlled by the commissariats of the jurisprudence. This will indirectly or indirectly affect the monetary value of belongings. Among the legal commissariats that affect the belongings values are limitations involvement and term of office of land. Restriction Interest

Restriction involvement is bind on right upon the importance which contained in the ownership papers. Restriction involvement is introduced by province authorities. There are two types of involvement towards ownership right, bumiputra and non-bumiputra. Bumiputra average individual who owned Malaysia citizenship and included in group of original in Malaysia and Malay race. Restriction involvement bring intending where batch from bumiputra merely can be exchanged towards another autochthonal and non to other. Properties without this limitation can be freely exchange to others. Bumiputera batch suffer less affect from belongings value comparing to belongings with no limitation involvement. Tenure of Land

Tenure of land had been distributed into two classs such as Freehold and Leasehold. Duration for each class are 99 old ages, 66 old ages and 20 old ages. Tenure of land showed that it is importance and proprietor rights in the belongings. There are two types of term of office such as Freehold and Leasehold. Freehold means the proprietor can hold their belongings for whole life-time. Besides that, leasehold is given limited old ages to the proprietor to have the belongings. Freehold term of office has a higher of value in belongings. ( Norhaya, Dzullkarnian, Ibrahim, 2010 ) . Mentioning to Kestens et Al. ( 2006 ) introduce household-level informations into hedonistic theoretical accounts in order to mensurate the heterogeneousness of inexplicit monetary values the old term of office position of the purchasers.

2.4 Impact on Residential Property

2.4 Decision

Based on treatment that have been made, clearly shows that there are many factors that affect residential belongings values in general can be divided as substructure installations, locational factors, physical factors, legislative factors and demographic factors. Each factor contributed to their organizing value in the belongings. Therefore, the research will concentrate on impacts of planning and development in residential belongings value. Abroad literature considers that planning besides has a important impact on lodging market by impacting locations, vicinity, environmental and population growing.

Based on treatment that have been made, clearly shows that there are many factors that affect residential belongings values in general can be divided as substructure installations, locational factors, physical factors, legislative factors and demographic factors. Each factor contributed to their organizing value in the belongings. How do these factors truly contribute to Senai development? In order to travel international at a fast stage, substructure is a must. Therefore, a immense modesty country in Senai is place under substructure ; easiness of surplus from mill to the universe is the chief concern of authorities. Although named as theodolite town, but most of the country is non yet under development until federal authorities decided to spread out its possible. With the sum of land and strategic location at South, it can be our 2nd industrial room access to other state other than Penang. This will equally administer industries among north and South of Malaysia. Modern design with terminal border engineering is the construct for the coming SHTP ( Senai High Tech Park ) , this will be one of the physical attractive force for investor.

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