CONCERN OVER PROPERTY VALUE: WILL THE SITTING OF PETROCHEMICAL HUB INFLUENCING HOUSING PRICE?

Abstract

Malaysia is a major exporter for petrochemical products. In line with this, the petrochemical industry is experiencing continuous growth and expansion. This study intends to examine the effect of the establishment of petrochemical hub on nearby housing price. Using residential transaction data of year 2016-2022 nearby Gebeng Industrial Area, we analyse the effect of the sitting of petrochemical hub via hedonic models. Our result indicates that the sitting of petrochemical hub will influence the housing price in which those located nearby will experience higher appreciation in property prices. This study is essential in clearing the doubt that housing price will be negatively influenced by petrochemical hub. Our findings further indicate that there is a need to educate local residents on the impact of the industry cluster on their house, in mitigating local opposition due to concern over declination of housing price due to the sitting of petrochemical hub.