Putra Heights Gas Explosion May Lead To Property Value Drop Of Up To 20pct

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Property values in and around the site of the recent underground gas pipeline explosion in Putra Heights may decline by between five and 20 per cent in the short term, experts say. Pic by NSTP/HAIRUL ANUAR RAHIMKUALA LUMPUR: Property values in and around the site of the recent underground gas pipeline explosion in Putra Heights may decline by between five and 20 per cent in the short term, experts say.
Homes in the affected area, comprising mostly double-storey terrace houses, are typically priced between RM650,000 and RM850,000. A potential drop in value could see RM850,000 homes depreciating by as much as RM170,000, while RM650,000 properties could lose up to RM130,000.
Malaysian Institute of Property and Facility Managers (MIPFM) president, Ishak Ismail, said a similar situation was observed in Shah Alam following the massive floods in late 2021. However, the state government acted swiftly, carrying out flood mitigation efforts and deepening river channels to restore confidence.
"As in that case, public perception could drive a drop in property values in Putra Heights, but the actual impact will only become clear once property transaction records for the next six months are available," he said yesterday.
"Property transaction records, based on banking, transfer of ownership and stamp duty valuation data, typically take up to four months to materialise before they are reflected in market statistics.
"This drop in value is largely driven by public concern over safety, liveability, and health risks following an incident that was previously unimaginable in a mature residential neighbourhood.
"As such, the authorities must act promptly to repair damaged infrastructure and bolster public confidence, while also tightening standard operating procedures (SOPs) to prevent future incidents," he said.
On April 1, Selangor police chief Datuk Hussein Omar Khan confirmed that 364 victims from 74 families were affected by the explosion and fire caused by a leaking gas pipeline in Putra Heights. The disaster damaged 437 homes, with total property losses estimated at RM64.5 million.
Ishak, who is also Malaysian Muslim Real Estate Consultants Association (Peham) adviser, said consultants would only be able to conduct a proper valuation after six months, based on a review of transaction data.
Meanwhile, Universiti Kebangsaan Malaysia's Centre for Global Business and Digital Economy senior lecturer, Dr Sharizal Hashim, said property values in the area could decline by five to 20 per cent, depending on socio-economic and environmental factors, location, and resident sentiment.
He warned that in the worst-case scenario, values could fall by up to 30 per cent, especially for properties located in the immediate blast zone, if sustainable and reassuring action is not taken.
"For example, double-storey houses in the explosion zone valued between RM700,000 and RM1.3 million could see a drop of RM210,000 to RM390,000 if the decline reaches 30 per cent.
"Recovery efforts should not rest solely on the government. Construction companies, insurance providers, and Petronas must work together on a comprehensive action plan," he said.
He added that a revision of existing SOPs should be a key part of the response, as current procedures may no longer be adequate for the pace of today's economic development.
"This gas leak incident is different from natural disasters, which are often unavoidable. Here, the issue appears to stem from technical or procedural lapses," he said.
Menwhile, Universiti Teknologi Mara (UiTM) Shah Alam, Master's in Construction Engineering programme senior lecturer and postgraduate coordinator, Dr Mazlina Zaira Mohammad, said the incident could have both direct and indirect effects on property values in the area, particularly in the short term.
"Buyers and investors may now lack confidence in the safety and utility infrastructure in the area, which will likely suppress property demand for the time being.
"As a result, homeowners may be forced to lower their asking prices to attract increasingly cautious buyers."
However, she said any long-term impact on values would depend on how well the incident is managed. With transparent investigations and the introduction of additional safety measures, property prices could rebound within six to 24 months.
"Nonetheless, I believe Putra Heights still holds strong appeal due to its accessibility via major highways, proximity to public amenities, and surrounding development," she added. - NST

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