Attributes Influencing Property Transaction in Heritage Cities: The

ATTRIBUTES INFLUENCING PROPERTY TRANSACTION IN HERITAGE CITIES: THE PARADOX OF GEORGE TOWN AND MALACCA

Lee Lik Meng

Lim Yoke Mui

Nor'Aini Yusof

School of Housing, Building and Planning

Universiti Sains Malaysia

ABSTRACT

A lot of effort is spent on the application for heritage city status by the interested cities. Other than the recognition and preservation of culture and environment, a city hoped that the inscription will bring economic returns and will be one of the main drivers of economic growth. The main expectation usually contred on increased tourism and the many spin-offs from tourism. However, does the designation of being a world heritage city only accord such a limited economic benefit? Studies from other countries have shown that properties in a heritage designated area have a higher value as compared to properties outside the heritage area. Appreciating property value not only increases the personal asset wealth but collectively also of the city. Thus, the paper discusses this interesting trend and attempts to determine if the same is true for the two world heritage cities of George Town and Malacca. In order to study the value of heritage properties, a measuring tool is needed and the hedonic regression method was found to be suitable as the attributes of heritage. property can be taken apart and the effect of each attribute on the value of the property can be regressed from the calculation. In addition to the hedonic regression method, a second tool which is spatial autocorrelation analysis is used to determine the spatial influence on the transaction price of heritage properties.

The analysis of transaction prices for properties in the heritage areas of George Town and Malacca yielded interesting findings. Attributes related to heritage or conservation is found to have a positive impact on property value in George Town while heritage properties in Malacca behave in the opposite manner. The spatial autocorrelation analysis returns a positive but weak spatial relationship between the data indicating that location has an impact on the property value but not as strong as it is widely believed. The discussion of the attributes tested, together with the analysis results will provide a better understanding of the behaviour and characteristic of heritage properties in both cities which are jointly inscribed to the world heritage list as one entity but the heritage properties in both cities do not necessarily behave in the same manner.

Keywords: Heritage properties, Hedonic regression analysis, property values, George Town, Malacca