How to Check Property Market Value and Valuation Methods in Malaysia

If you're planning to buy or sell a house or property in Malaysia, understanding the market value of the property is crucial. This ensures a fair transaction, helping you avoid the risk of overpaying or selling below the property's true value.

In Malaysia, the property valuation process is typically conducted by professional property valuers. They use various property valuation methods to determine an accurate market value. These methods provide a reliable benchmark for both buyers and sellers, ensuring informed decisions in the Malaysian property market.

What is a Property Valuer in Malaysia?

A property valuer is a qualified professional trained to assess and determine the market value of a property. They provide accurate value estimates by analyzing various factors, including market trends, property location, physical condition of the property, and other elements that affect the property’s market value.

In Malaysia, property valuers must be registered with the Board of Valuers, Appraisers, Estate Agents, and Property Managers (BOVAEP), which ensures that they perform their duties ethically and professionally.

Why You Need a Property Valuer

• For Buyers: Understand the fair market price of a house or property in Malaysia.
• For Sellers: Ensure your property is priced accurately to maximize its value.
• For Investors: Make informed decisions based on the true value of your real estate assets.

Hiring a certified property valuer in Malaysia helps ensure fair and accurate property transactions, whether you're buying, selling, or working with a property agent in the Malaysian property market.

Function of Property Valuer

A property valuer plays a vital role in various property-related matters, including:

1. Determining the Market Value of a Property

With the assistance of a property valuer, owners, buyers, or investors can accurately determine the market value of a house or property. This ensures that property transactions are fair and based on the actual market value.

2. Providing Detailed Property Valuation Reports

Property valuers prepare comprehensive reports that explain the property's value, the reasoning behind the valuation, and the methods used. These reports are crucial for bank loan applications, particularly when buyers seek financing.

3. Applying Appropriate Valuation Methods

Several valuation methods are commonly used, including the comparison method, income method, and investment method. The choice of method depends on the type of property and the purpose of the valuation.

4. Assisting in Property Buying and Selling

Accurate valuations by property valuers ensure that both buyers and sellers set or pay a price aligned with the property’s market value, avoiding overpricing or underpricing.

5. Considering Depreciation Factors

Property valuers also assess factors related to depreciation, such as a decline in property value over time due to wear and tear, aging, or less strategic location. This helps in providing a realistic value for the property.

What is the Market Value of a House in Malaysia?

The market value of a house refers to the estimated price of a property based on factors such as property condition, location, and current market demand. This valuation is crucial for ensuring that property transactions reflect the true worth of the asset.

In Malaysia, the property market value is typically assessed by a registered property valuercertified by the Board of Valuers, Appraisers, Estate Agents, and Property Managers Malaysia (BOVAEP). Their role is to deliver an accurate, unbiased, and fair property valuation.

Why Knowing the Market Value is Essential:

• For Buyers: Avoid overpaying by understanding the true market price of the house.
• For Sellers: Ensure you sell at a fair price, aligning with the current property market value.
• For Investors: Make informed decisions with reliable data on property value in Malaysia.

How Market Value is Determined:

Valuers consider several key factors, including:

• Location of the property: Proximity to amenities and infrastructure.
• Property condition: Age, wear and tear, and maintenance.
• Market trends: Demand and supply in the local area.

Knowing the market value of a property in Malaysia is essential for a smooth, fair transaction, whether you're buying, selling, or investing in real estate.

Why is it Important to Check the Market Value of a House or Use Revaluation Methods?

Checking the market value of a house in Malaysia is essential to ensure the price reflects the current property market value. For buyers, it serves as a safeguard by knowing the actual market value of the property, you can avoid overpaying. Moreover, banks use the property market value provided by a registered property valuer to determine the amount of loan they can approve. This makes accurate valuation critical for securing the right financing.

For sellers, understanding the property’s market value helps you set a competitive price. Pricing too low could lead to losses, while pricing too high might make the property difficult to sell.

7 Property Revaluation Methods Used by Property Valuers

A property valuer gathers data about a property, including its location, amenities, and comparisons with similar properties. They apply various revaluation methods to accurately determine the market value of a property. Here are the most commonly used methods:

1. Comparison Method

This is the primary method for residential and frequently traded properties. The valuer compares the prices of similar properties recently sold in the area to determine the market value of a house. This method provides a clear reflection of current market trends.

2. Residual Method

Used for land with development potential. It involves calculating the land’s value by subtracting development costs and expected profits from the completed development’s value. This method is ideal for undeveloped or development-potential land.

3. Profits Method

This method applies to income-generating commercial properties, such as hotels or gas stations. It’s based on the net profit the property can generate. It’s useful for properties with no open market comparison.

4. Investment Method

This method values a property based on its potential returns, particularly for rental properties. Key factors include current rental rates and investment yield. It’s commonly used for office buildings or commercial rental properties.

5. Cost Method

Used for unique or rarely traded properties, such as heritage buildings. The valuation is based on the cost to rebuild the property, adjusted for depreciation, to provide a more accurate value.

6. Contractor’s Method

A variation of the cost method, often used for specialized properties with limited market comparisons. It combines construction costs and land value to estimate the property’s value.

7. Residual Method (Land Value Focus)

This approach evaluates the remaining value of land after deducting development costs. It’s typically used for land with development potential but still under consideration. The method factors in market value post-development and associated costs. 

Each of these methods is chosen based on the property type and the purpose of the valuation. By employing these techniques, property valuers can accurately determine the market value of a property in Malaysia.

Factors Influencing the Market Value in Property Valuation

The market value of a house or property is not solely determined by its price but is influenced by several key factors that play a significant role in its valuation:

1. Location

Properties situated in strategic locations, such as urban areas or those close to essential amenities like schools, shopping centers, and commercial hubs, tend to have higher market value. Easy access to these facilities increases buyer appeal, directly affecting the property's value.

2. Property Condition

The physical condition of the property significantly impacts its market value. Well-maintained properties that require little to no repairs are generally valued higher than those needing extensive work.

3. Nearby Amenities

Proximity to essential services such as public transportation hubs (LRT and MRT), hospitals, and recreational facilities also boosts the market value of a house. Buyers often prioritize these conveniences, making them crucial in determining property value.

4. Land Survey Costs

For properties requiring official land re-surveying, the cost of land surveying could add to the overall investment. These additional costs may influence the final market value, especially in specific property transactions.

5. Depreciation

Depreciation refers to the decline in a property’s value over time due to factors like aging, damage, or structural deterioration. Property valuers account for depreciation to provide a more accurate market value.

By understanding these factors, buyers, sellers, and investors can better navigate the property market and make informed decisions based on the true market value of a property.

How is the Process of Checking the Market Value of a House Conducted?

The process of checking the market value of a house involves several crucial steps, typically carried out by a qualified property valuer:

1. Physical Property Inspection

The process begins with a thorough physical inspection of the property. This includes evaluating the structural condition, age of the building, layout, and any unique features that may affect the market value of the house. The valuer will document the property’s condition through photographs and detailed notes.

2. Market Data Collection

The valuer gathers data on comparable properties in the area, including the sale prices of similar properties recently sold. This data serves as a benchmark for assessing the property’s market position. The comparison method is often used, which involves comparing the property to others with similar characteristics.

3. Market Analysis

Based on the collected data, the valuer conducts a comprehensive market analysis. This analysis considers factors such as location, current market conditions, nearby amenities, and any additional land surveying costs that may apply.

4. Depreciation Calculation

The valuer accounts for depreciation, which refers to the reduction in the property’s value due to factors like aging and damage. This ensures that the estimated market value is realistic, reflecting the property's actual condition.

5. Preparation of Valuation Report

After completing the analysis, the valuer prepares a detailed valuation report. This report includes all gathered data, the applied valuation methods, and the estimated market value of the house. The report is a crucial reference for both buyers and sellers.

6. Verification by the Board of Valuers, Appraisers, and Estate Agents Malaysia (BOVAEP)

Each valuation report is reviewed by BOVAEP to ensure its accuracy and validity. The board acts as a regulatory body, ensuring that all valuations are conducted with integrity and professionalism.

How to Check the Market Value of a House Online

Nowadays, property owners and buyers can easily check the market value of a house online using platforms like Property Genie. These platforms provide value estimates based on property details such as location, size, and nearby amenities. Here's how to use Property Genie Transaction for an online property valuation:

1. Access the Property Genie Website

Visit the Property Genie website and navigate to the "Transaction and Statistics" section.

2. Select Property Type and Location

Choose the type of property (e.g., residential, commercial, or industrial) and specify its location, whether in a city or a specific area. This information helps Property Genie tailor its search for property transactions relevant to your needs.

3. Apply Property Search Filters

Use filters such as house size, time period, and more to refine the search. This allows you to view data that closely matches your specific requirements.

4. Analyze Transaction Data

Property Genie will display the median property prices in your chosen area. You can also view the median price per square foot to better understand the average pricing trends in that location.

5. Compare Property Prices

Take advantage of the comparison feature to analyze different properties. This helps you identify the most suitable price and make smarter decisions when buying or selling a house.

Why Understanding Market Value Matters

Using online tools to understand the market value of a house ensures fair and informed transactions. However, for a more accurate and reliable valuation, it's always advisable to seek professional services from a certified property valuer registered with the Board of Valuers, Appraisers, and Estate Agents Malaysia (BOVAEP).

Use the comparison feature to evaluate different properties. This allows you to identify the most appropriate price and make more informed decisions when buying or selling a house.

In summary, understanding the market value of a house through property valuation is key to ensuring a fair transaction. Considering all relevant factors helps in determining a more accurate property market value. For greater accuracy and assurance, don't hesitate to seek professional assistance from a certified property valuer registered with the Board of Valuers, Appraisers, and Estate Agents Malaysia (BOVAEP).

Other Article:

• Standardised Base Rate (SBR): How It Impacts Your Loans
  
• The Pros and Cons of Debt Consolidation: What You Need to Know
• MADANI Budget 2025: Housing Scheme to Boost Home Ownership