KUALA LUMPUR: The recent gas pipeline explosion in Putra Heights may prompt financial institutions to reconsider how they assess properties before approving financing, according to property consultancy Henry Butcher.
In its second quarter (Q2) newsletter, the firm suggested that banks and lenders might begin checking whether properties are located near gas pipelines, following the April 1 incident that devastated the residential area.
Henry Butcher Malaysia chief operating officer Tang Chee Meng said this concern is likely to extend to both buyers and valuers.
He noted that buyers will begin asking whether a property is located near a gas pipeline, while valuers will also factor that into their market assessments.
Tang added that adjustments would be made in much the same way as for properties located near flood zones, power lines, cemeteries, steep slopes or sewage treatment plants, all of which are elements that typically reduce a property’s appeal and value.
The explosion damaged a total of 219 homes: 81 were destroyed, 81 partially damaged, and 57 affected without structural harm.
Losses have been estimated at RM65.4 million.
Last week, the Malaysian Institute of Property and Facility Managers (MIPFM) cautioned that property values around the explosion site could drop between five per cent and 20 per cent in the short term.
MIPFM president Ishak Ismail said Shah Alam experienced a comparable drop in property values following the severe floods that struck the area in late 2021.
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