QUANTIFYING NATURE'S IMPACT: FLOOD VULNERABILITY AND THE MALAYSIAN RESIDENTIAL MARKET
DOI:
https://doi.org/10.21837/pm.v23i38.1886Keywords:
Housing Prices, Real Estate Market, Flood Impact, Natural DisasterAbstract
Flooding, a frequent and devastating natural disaster, poses significant risks to residential property markets, including in Malaysia. This study aims to quantify the impact of floods on house prices in Johor Bahru, a region increasingly prone to flash floods. Approximately 468 property transactions from 2013 to 2022 were analysed using the Hedonic Pricing Model to determine how flood risk influences house prices. Contrary to the global consensus that flood exposure depresses property prices, the results indicates a modest price premium effect for properties located within flood-prone areas. This suggests that local market dynamics including strategic location, established neighbourhood amenities, and community risk adaptation offset the typical price discounts observed internationally. The findings offer new empirical insights for Malaysian urban studies and highlight that environmental risks may not be universally internalised in the same way across markets. The findings also offer insights for homeowners, buyers, planners, valuers, insurers, financiers, and policymakers, guiding informed decision-making in flood risk management and urban planning. Future research may explore other regions and incorporate additional spatial and environmental variables to better understand hazard-related price behaviour across diverse Malaysian contexts.
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