SGH 3113 (PROPERTY MARKET RESEARCH)
LABORATORY QUESTIONS
Lab one
Objective: To introduce the students to some of the basic elements of market research – the
competitor analysis.
Instructions:
1. Choose the following sub-markets as your study case.
Group no.
1
2
3
4
5
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Sub-market
Johor Bahru
Melaka
Penang
Alor Star
Ipoh
Kota Bharu
Kuala Terengganu
Kuantan
Seremban
Shah Alam
Kelang
F.T of Kuala Lumpur
Muar
Batu Pahat
Kluang
Petaling Jaya
Kajang
Perlis
Sabah
Sarawak
2. Based on the internet search, identify the major property development projects in your
sub-market area. Describe the development activities based on the following aspects:
- the developer company and its brief profile
- the project, location, and type of property developed
- the number of units built in each project
- the per unit selling price of each type
3. Analyse the following aspects:
- the basic descriptive statistics of the land area and floor area
- the per sq. ft. selling price
- your group’s comments on the attractiveness of the location and product
- the potential demanders for the product in question (give your rationale).
Note: You must accompany your analysis with evidence of the project such as the location
plan, site plan, pictures of the product, floor plan, etc.
Lab TWo
Objective: To introduce the students to the concept of inferential analysis in property market
research. [Note: Read Basic Aspects of Property Market Research, chp. 2.]
Instructions:
1. Check the sub-market that you have chosen for the study case in Lab 1. Based on the
sub-market, obtain the following information at the state and district levels, where the
competitors’ projects are located:
1.1 Demographic factors
* population structure (age, sex, ethnic, etc.)
* employment by sector (agriculture, manufacturing, services, etc.)
* income structure (e.g. by sector, occupation, etc.)
* In- and out-migration
* Pertinent factors that may affect property industry in your area of study
1.2 Economic/market factors
* level of inflation
* unemployment & labour force
* consumer price index
* property supply situation by category
* property demand by category
* loan facilities (including interest rate, loan margin, etc.)
3. Based on 1.1 & 1.2 above, infer the potential demand for the projects that you have
studied in Lab One. Some of the information obtained from Lab One may be used for this
purpose.
Lab 3
Objective: To analyse potential demand for property product. In this case, residential
properties are chosen as a case.
Instructions:
In Lab Two, you have been required to estimate ‘global demand’ for a particular geographic
area in which a particular property project is proposed. In this lab, you are required to
estimate specific demand for a specific product on a specific site.
Background
You are required to refer back to your Lab Two. Use the study area that you have chosen
(e.g. Kuala Lumpur, Johor Bahru, Melaka, etc.) in Lab Two for this exercise.
Choose one of the proposed project, in particular, residential development project covering
the area of your selection. Your project is assumed to conform to the Local Plan provided by
the Local Authority and does not infringe any of the existing law and regulations. This project
is exempted from building low-cost houses by the State Government.
Following the above criteria, you are to do the following:
(a) Show and explain (the method of) how you estimate the demand for EACH
product type that you have proposed
(b) how and explain (the method of) how you recommend the selling prices of
various sub products, to the developer.
In conducting your demand analysis, you must clearly indicate the sources of demand viz.,
local area, net in-migration, spill-over effect, and alien buyers. You can assume, in doing so,
mutually non-exclusive demand in the area. Otherwise, you need to consider market share of
the developer and the market share of the project area.
In deciding on the potential demand, use the following model:
QI = [.dP x i x 1/12) / (1- 1/(1+i)n)] x 36
where QI = qualifying annual income; .d is loan margin in decimal point (e.g. loan margin of
80% means .d = 0.8; P is selling price of the property; i = interest rate (say 8%); n = number
of years of monthly installment.
Lab 4
Property Market Analysis (PART I)
Objective: To expose students to some aspects of property market analysis. In particular,
students will be exposed to a preliminary market investigation for a particular property
development.
Instructions:
Read the following description of a parcel of land which is under consideration for a project
development. Each group is required to execute the necessary steps in the investigation and
collect information from the activities involved.
You are investigating a parcel of land having the following particulars:
Lot. No.
Title No.
Mukim
District
State
Land Area
Tenure
Annual Rent
Category of Land Use
:
:
:
:
:
:
:
:
:
P.T. 8249
H.S. (M) 1779
Senai – Kulai
Kulai
Johor Darul Ta’azim
3.224 ha. (7.967 ac.)
Freehold
RM73.00
Agriculture (Rubber)
Some description of the property:
The subject property is located within a locality called Kg. Melayu Seelong, about 10 km due
north-east of Senai village. It is accessible via two directions. Firstly, via Jalan Kempas Lama
for about 15 km, before turning right for about 4 km and finally turning left onto a road leading
to the subject property. Secondly, via Skudai-Senai highway before turning right to Senai
Airport road and turning right again to Seelong for about 6 km.
Steps to be executed:
Group
Activities to be undertaken
Remarks
1.
Title search (hint: Johor Bahru
PTG)
Check the planning information
(hint: Department of Planning,
MBJB)
Ascertaining comparable property
value in the surrounding area
(hint: JPPH, Johor Bahru)
Explain in detail why you need to do title
search and how you do it.
Explain in detail why you need to do check on
planning, how you do it and what information
you gather.
Explain in detail why you need to do check on
property value in the surrounding area, how
you do it and what information you gather.
2.
3.
4.
Description of the property and
site analysis
Describe in details the subject property,
including its site and location. You must
provide a clear and informative site and
location plan of the property using a scaled
map and photographs.
Describe in details the immediate and
surrounding areas of the subject property.
You must provide a clear and informative site
and location plan of the property using a
scaled map and photographs.
Conduct a simple site analysis of the
property.
Describing the local competition
Search for information on developer
companies and profiles of their projects (e.g.
location, type of property, number of units
built, and selling price)
Local economic and market study
Search for information on the local population
structure (age, sex, ethnic, etc.), employment,
income structure, in- and out-migration, and
other pertinent factors that may affect
property development in the study area.
Search for information on the local economic
and market factors such as level of inflation,
unemployment & labour force, consumer
price index, property supply and demand
situation, and loan facilities.
Inferential analysis
Based on the local economic and market
study, perform an inferential analysis of the
area.
Conversion process
You are required to secure information from
the relevant authorities and describe the
process involved to convert the parcel from
agriculture to building.
Clearly indicate all the relevant the costs
involved in the process.
5.
Market valuation of the property
under its present use
With the cooperation from other Group 1
above, carry out valuation on the subject
property using the information from the
comparable properties.
Preliminary feasibility study
With cooperation form other groups, you are
required to assess the site for possible
development of a small-scale project
comprising bungalows and semi-detached
houses.
Indicate a simple project plan.
Among other things, your focus will be on the
main development activities and the related
costs and selling prices. Make sure you
collect real cost figures.
6.
Preliminary feasibility study
With cooperation form other groups, you are
required to assess the site for possible
conversion from agriculture to bungalow lots.
Indicate a simple project plan.
Among other things, your focus will be on the
main development activities and the related
costs and selling prices. Make sure you
collect real cost figures.
7 – 20.
Sample survey on the prospective
buyers
Each of Group 7 to 20 is required to conduct
a local survey in the Senai-Kulai area and the
surrounding areas among at least 30
qualified respondents (e.g. based on age and
income)
Among other things you should include
profiles of the prospective buyers such as the
current address, place of work, age, sex, type
of occupation, category of occupation
(private, government, etc.) income, family
size, working family members, state of
property ownership (e.g. own a house,
renting, looking for another house, etc.),
buying interest (e.g. interested, not
interested), preferred product type (e.g.
bungalow, semi-detached, etc.) preferred
price, preferred location, etc.
Lab 5
Property Market Analysis (PART II)
Objective: To expose students to some aspects of property market analysis. In particular,
students are required to carry out a basic valuation of the subject property that is proposed
for a certain development.
Instructions:
Read the questions carefully before answering.
This lab work is a continuation of Lab 4 (Part I). In this Lab, you are required to come up with
a valuation report. You must be able to identify the question that your can answer from your
own data collection as per activities required under Lab 4 (Part I) and the answer that you
need to obtain information from other groups.
These questions are not arranged in order. You must decide on the appropriate format for
reporting and then organize your sections of valuation report accordingly. Write your report in
English using Microsoft Word. If your answer involves calculation, use Excel. All maps,
pictures, photographs, and exhibits or appendices must be presented in a clear and
meaningful manner.
The key questions that you must address in the valuation report are as follows:
1. Based on title search, write down the details of the title, including title restrictions.
2. Based on the planning information, describe the zoning surrounding the subject property.
Wherever is possible, show the planning map.
3. Based on the latest evidence of comparable properties, describe the market condition in
the surrounding area of the subject property. Comment on your observation.
4. Describe the subject property in details, including its site and relative location. Also,
describe the immediate and surrounding areas of the subject property in detail. You must
provide a clear and informative site and location plan of the property using a scaled map
and photographs.
5. Based on the evidence of the comparable properties, carry out valuation of the subject
property in its current status. Show the valuation steps clearly, including the schedule of
value adjustment.
6. Conclude your opinion about the value of the subject property in its current status.
Lab 6
Property Market Analysis (PART III)
Objective: To expose students to some aspects of property market analysis. In particular,
students are required to carry out consumer profiling that will be incorporated into the market
and feasibility analysis.
Instructions:
Read the questions carefully before answering.
This lab work is a continuation of Lab 4 and Lab 5. In this Lab, you are required to come up
with a consumer analysis. This is a sample-based description of the essential characteristics
of the prospective property buyers in the study area.
Use the information from the survey that you have conducted before. You must make use of
all the sample surveys conducted by groups 7-20.
Questions:
1. Use a spreadsheet/statistical program (e.g. Excel, SPSS, etc.) and summarise your data
from the consumer survey. Create a data matrix containing all the information that you have
collected. Make sure you label each of the variable.
2. Based on the data matrix, do consumer profiling in the area of study. Format your
analysis so that it reflects the essential information of consumer characteristics that will be
used as part of demand analysis. Your analysis must be accompanied by the necessary
tables, chart, figures, etc.
3. Make some conclusions about the prospective buyers and demand potential from your
analysis.
Lab 7
Property Market Analysis (PART IV)
Objective: To expose students to some aspects of property pricing analysis. In particular,
students are required to carry out property price modeling as part of a market analysis.
Instructions:
You are given a set of transaction records of condominium properties in various places in the
vicinity of Johor Bahru;s Central Business District (CBD) in 2007 (see Table 7.1).
Although theoretically there are a number of pertinent factors affecting the prices of
condominium properties, you are given only some selected ones for this exercise.
Using the evidence, you are required to propose the prices and rentals of residential units of
a proposed condominium project in the Seelong (Senai-Kulai) area. [See your previous
laboratory works.]
The basic specifications of the proposed product mix are as follows:
Floor area Units Bed Bath
(sq. ft.)
Position
1000
1200
1500
1700
2200
Intermediate
Intermediate
Intermediate
Corner
Corner
50
50
100
20
20
3
3
3
3
4
2
2
2
2
3
Since you could not find reliable evidence in the Senai-Kulai area, you have resorted to
comparing the proposed project with those already in place in the vicinity of Johor Bahru City
area (Table 7.1). From your further investigation, you found that the condominium prices in
the vicinity of Johor Bahru’s CBD are about 30% higher than those in other Johor Bahru’s
out-skirt areas.
To analyse the pricing structure of the proposed project, you have to follow a number of
modeling steps:
1. Specify the model Price = f(Floor area, no. of bedroom, no. of bathroom, tenure status,
furnishing, property position, view orientation)
2. Define the variables to be included in the model. For example
Variable
Dependent:
Price
Independent:
Floor area
Number of bedrooms
Number of bathrooms
Fully furnished
Partly furnished
Corner position
North view
South view
West view
Label
Ringgit
Square footage
Unit
Unit
1 = yes; 0 = otherwise
1 = yes; 0 = otherwise
1 = corner; 0 = otherwise
1 = yes; 0 =otherwise
1 = yes; 0 = otherwise
1 = yes; 0 = otherwise
Expected
sign
PRICE
FLOO
BED
BATH
FNS-1
FNS-2
CORN
NORTH
SOUTH
WEST
+ve
+ve
+ve
+ve
+ve
+ve
?
?
?
3. Convert the data in Table 7.1 into data matrix in Excel.
4. Use Excel’s Tool  Data Analysis  Regression menus to derive the regression model.
5. Test the goodness of fit of the model based on log-log, log-linear, linear-log, and linearlinear functions.
6. Based on the selected model and after some locational adjustment, estimate the
proposed price structure of the product mix. You must estimate the prices and rentals of
these properties based on the tenure (freehold, leasehold) status of the units as well as
the view/facing positions (west, east, north, south). For convenience of analysis, assume
that all the units are sold or rented unfurnished.
Table 7.1: Condominium transactions in Johor Blahru in 2007
Location
Stulang View Condo, Johor Bahru, JO
Straits View Condo, Johor Bahru, JO
Indah Samudra Condo, Johor Bahru, JO
Straits View Condo, Johor Bharu, JO
Straits View Condominium, Johor Bahru, JO
Jalan Pahlawan, Johor Bahru, JO
Aloha Towers, Johor Bahru, JO
Orchid View Condominium, Johor Bahru, JO
Sri Mulia Condominium, Johor Bahru, JO
Permas Ville Apartment, Johor Bahru, JO
Danga View, Danga Bay, Johor Bahru, JO
Bayu Puteri Apartment, Johor Bahru, JO
Jalan Datin Halimah, Johor Bahru, JO
Jalan Datin Halimah, Johor Bahru, JO
Jalan Tampoi-Johor Bahru, Tampoi
Wadihana, Johor Bahru, JO
Jalan Bayu Puteri, Johor Bahru, JO
Danga View, Danga Bay, Johor Bahru, JO
Danga View, Danga Bay, Johor Bahru, JO
Bistari Impian, Johor Bahru, JO
Bistari Impian, Johor Bahru, JO
Danga View, Danga Bay, Johor Bahru, JO
Indah Samudra Condo, Johor Bahru, JO
Petria Condominium, Jln Ungku Petria, Johor
Bahru, JO
Tenure
Floarea
No.Bed
No.Bath
Furnish
Position
View
Mnt.Fees
Price
Freehold
Freehold
Leasehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Leasehold
Leasehold
Freehold
Leasehold
Leasehold
Freehold
Leasehold
Leasehold
Leasehold
Leasehold
Leasehold
Leasehold
Leasehold
1911
1650
1800
1650
1600
1215
1700
1500
2000
1200
1020
1001
1250
1100
1100
1800
1001
1038
2176
1000
1000
1038
1710
3
4
4
4
3
3
3
4
4
3
3
3
3
3
3
4
3
3
3
3
3
3
4
3
2
3
2
2
2
2
2
3
2
2
2
3
2
2
3
2
2
2
2
2
2
3
Full
Full
Unfurn.
Full
Unfurn.
Unfru.
Full
Full
Full
Full
Full
Unfurn.
Partly
Full
Partly
Partly
Unfurn.
Full
Partly
Unfurn.
Unfurn.
Partly
Full
Intermediate
Corner
Intermediate
Corner
Intermediate
Intermediate
Intermediate
Corner
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Intermediate
Corner
Intermediate
Intermediate
Intermediate
Intermediate
West
North
West
West
South
South
North
North
North
East
East
North
South
South
East
South
South
East
West
North
North
East
South
400
300
300
300
300
200
250
300
400
300
300
200
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
400000
450000
320000
450000
350000
140000
350000
490000
450000
210000
300000
160000
220000
230000
160000
430000
150000
350000
800000
165000
175000
285000
380000
Freehold
1300
3
2
Full
Intermediate
West
NA
560000
Table 7.2: Rental-Price Relationship of Condominium in Johor Bahru, 2007
Rental (RM)
Price (RM)
1700
2000
2500
2500
800
700
1200
1500
1600
700
2000
3500
2800
300000
210000
450000
490000
160000
150000
220000
230000
430000
150000
350000
380000
490000
** End of Lab Questions **