UNIVERSITI TEKNOLOGI MARA (UITM)

COLLEGE OF BUILT ENVIRONMENT

BACHELOR OF ESTATE MANAGEMENT (HONS) – AP225

SEMESTER: OCTOBER 2022 – FEBRUARY 2023

RES 555: URBAN LAND ECONOMICS

ASSIGNMENT 1: PUBLIC TRANSPORTATION AND ITS EFFECTS ON REAL

ESTATE MARKET

CLASS: AP2254A

PREPARED BY:

NO. NAME MATRIC CARD

1. NUR NAYLI BINTI ABDUL RAHIM 2021114297

PREPARED FOR:

MS. WAN NUR AYUNI BINTI WAN AB RASHID

 PUBLIC TRANSPORTATION AND ITS EFFECTS ON REAL ESTATE MARKET
Welfare economics is a study of allocation of resources and goods that relates
with social welfare. Economic efficiency and income distribution are said to be directly
related to welfare economics and it affect the general well-being of the people (THE
INVESTOPEDIA TEAM , 2022). Moreover, the idea of welfare economics is developed
through the application of utility theory by microeconomics and the mentioned utility
includes value that associates with certain goods or services. Besides, the welfare
economics can be a lead for a government in order to develop a policy. This is because
the welfare economics might create a minimum quality of living expectation in certain
field (Gordon, 2022). The objective of the issue above is to identify the public
transportation and its effects on the real estate market and the related approaches.
Public transportation is one of the public goods that contribute to the welfare
economics. It is a form of transportation built by the government which enable the
people to move from one place to another through the designated routes without
having to drive their personal transportation. In Malaysia, there are a few public
transportations offered such as Light Rapid Transit (LRT), Metro Rail Transit (MRT),
Keretapi Tanah Melayu and buses (Conserve Energy Future, n.d.). Most of Malaysian
prefer to travel to works or school by public transports in order to avoid traffic
congestion and to save cost.
However, though people prefer to use public transports rather than drive by
their own, there are a few inconvenient incidents that caused dissatisfaction of the
users such as the public transport is not easily accessible (Tan, 2021). According to
Tan (2021), lack of coverage and accessibility are the huge problems for public
transport in Malaysia. This is because, most of the public transportation stations are
located way too far from housing area and the users had to drive to go to the station.
Therefore, to solve this problem, the public transport managers need to consider to
build the station in areas that are near to residential areas. According to Moorthy &
Jeronn (2014), the prices of properties have always related with the accesibility to the
public transport. Therefore, residential that are built near a rail transit tend to be sold
at higher prices due to its convenient that allows people to access to the public
transport easily (Moorthy & Jeronn, 2014).
Nevertheless, though it is convenient to live near a rail transit, there is one
problem that can cause the value of houses that are built near to public transport
station to decrease, which is noise pollution. According to IBERDROLA (n.d.), the
World Health Organization (WHO) has stated, any noise that reach above 65 decibels
will lead to a noise pollution. Therefore, it is recommended to keep the noise level
below 65 decibles during the day. People might see noise pollution as a small matter
however, there are a few effects of noise pollution that can cause damage to the
human health such as psychological and especially, sleep and behavioural disorders.
This is because, any noise that reach to 45 decibels will cause people to have trouble
sleeping hence, it affects the human body by the attack of stress, fatigue and
depression (IBERDROLA, n.d.).
Nonetheless, the issues above can be prevented with the government
intervention. One of the government efforts to support the welfare economics is
offering housing subsidies to those who are qualified. This is because, most of the
users of public transportations are coming from poor people or known as B40, as some
of them cannot afford to buy a personal vehicle and they might have spent most of
their earnings on house rental. Therefore, in order to lessen their burden, the Malaysia
government have introduced a few housing schemes that are affordable for those
people to live in. For instance, Skim Perumahan Rakyat Malaysia (PR1MA), Program
Perumahan Rakyat Termiskin (PPRT) and Rumah SelangorKu. The price range for
this housing schemes are from RM10,000.00 to RM300,000.00. As for the noise
pollution, it can be prevented by establishing law that include preventive action. For
example, the public transport has it schedule and it is mandatory for the operation to
follows whereby, the operation of the public transport must end at 10 P.M, hence there
will be no noise pollution coming from the public transport near the residential area.
In conclusion, living in residential area that are built near the public
transportation routes and stations, have its advantages and disadvantages. As
discussed above, most of residential area that are near to rail station tend to be sold
or rented out with higher price. The price also may decrease due to certain problems
such as noise pollution as people might choose comfort over facility. However, those
issues can be prevented with the intervention of the government by offering subsidies
and establishing regulations that suit the situation and place.
(816 words)
REFERENCES
Conserve Energy Future. (n.d.). What is Public Transportation: Modes and Benefits .
Retrieved from Conserve Energy Future: https://www.conserve-energy-
future.com/benefits_of_public_transportation.php
Gordon, J. (2022, June 15). Welfare Economics- Explained What is Welfare
Economics. Retrieved from The Business Professor:
https://thebusinessprofessor.com/en_US/economic-analysis-monetary-
policy/welfare-economics-definition
IBERDROLA. (n.d.). Noise pollution: how to reduce the impact of an invisible threat? .
Retrieved from IBERDROLA: https://www.iberdrola.com/sustainability/what-is-
noise-pollution-causes-effects-
solutions#:~:text=The%20World%20Health%20Organization%20(WHO)%20d
efines%20noise%20above%2065%20decibels,is%20painful%20above%2012
0%20dB.
Moorthy, R., & Jeronn, N. (2014). Public Transportation Effect on the Rising of
Property Prices in Malaysia: A Correlation Study of MRT Project. Integrative
Business & Economics , 352.
Tan, A. (2021, February 27). 6 Problems with Public Transportation in Malaysia .
Retrieved from Teh Talk : https://tehtalk.com/6-problems-with-public-
transportation-in-malaysia/
THE INVESTOPEDIA TEAM . (2022, June 06). Welfare Economics Explained:
Theory, Assumptions, and Criticism . Retrieved from Investopedia :
https://www.investopedia.com/terms/w/welfare_economics.asp#:~:text=our%2
0editorial%20policies-
,What%20Is%20Welfare%20Economics%3F,of%20people%20in%20the%20
economy.
 RES555 NAYLI
by Nayli Rahim

Submission date: 11-Nov-2022 09:54AM (UTC+0530)

Submission ID: 1870577768
File name: RES555_TURNITIN.docx (17.22K)
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RES555 NAYLI
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