# RECORD 6ba1087eea411b2f100fdeb063e521295b5d112b # TITLE: Defining the Existence of Housing Submarkets for Terraced Properties in Johor Bahru # YEAR: 2024.0 VENUE: International Journal of Sustainable Construction Engineering Technology DOI: 10.30880/ijscet.2024.15.01.004 # AUTHORS: Wendy Xin; B. Burhan; Mohd Lizam Mohd Diah # PAGES: 7 CANDIDATE TABLE PAGES (1-based): [] # ABSTRACT: Recent research on housing submarkets over the decades and the necessity to categorise heterogeneous property markets into distinct submarkets are deemed essential in the real estate field. Housing submarkets operate based on the concept of a group of dwellings that are substantially close substitutes to one another, but are relatively poor substitutes for dwellings in different submarkets. This mechanism primarily depends on spatial variations in housing characteristics related to structure, location, and neighbourhood. Housing submarkets are vital in enhancing the precision of housing pricing and analysing the dynamic shifts in the property markets. This study aimed todefine and examine the presence of housing submarkets for the terraced properties in Johor Bahru with the Malaysian Valuation and Property Services Department (JPPH) housing transaction database. The database documented 63,036 housing transactions between2009 and 2018 with thirteen independent structural and locational housing attributes. The study also recommended an objective data-driven methodology by integrating principal component analysis (PCA) and cluster analysis to delineate housing submarkets. Resultantly, the presence of housing submarkets was identified within the property market with the delineation of two specific submarket effects, namely the housing location cluster and housing quality cluster. The submarkets provided a comprehensive framework for segregating property traits into prospective clusters. Establishing housing submarkets may provide valuable insights, implicit cluster details, and a more reliable hedonic price model prediction. The outcomes could be employed by property valuers, analysts, and urban planners for a sound comprehension of current real estate circumstances. ===== PAGE 1 (score 4, numeric-paren 0, table-words 0, var-words 4) ===== INTERNATIONAL JOURNAL OF SUSTAINABLE CONSTRUCTION ENGINEERING AND TECHNOLOGY ISSN: 2180-3242 e-ISSN: 2600-7959 IJSCET Vol. 15 No. 1 (2024) 41-47 https://publisher.uthm.edu.my/ojs/index.php/ijscet © 2024 UTHM Publisher. All rights reserved. This is an open access article under the CC BY-NC-SA 4.0 license. Defining the Existence of Housing Submarkets for Terraced Properties in Johor Bahru Wendy Lim Wen Xin1*, Burhaida Burhan1, Mohd Lizam Mohd Diah1 1 Department of Real Estate Management, Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia, Parit Raja, Batu Pahat, 86400, MALAYSIA *Corresponding Author: limwendywenxin@gmail.com DOI: https://doi.org/10.30880/ijscet.2024.15.01.004 Article Info Abstract Received: 28 November 2023 Accepted: 05 December 2023 Available online: 26 February 2024 Recent research on housing submarkets over the decades and the necessity to categorise heterogeneous property markets into distinct submarkets are deemed essential in the real estate field. Housing submarkets operate based on the concept of a group of dwellings that are substantially close substitutes to one another, but are relatively poor substitutes for dwellings in different submarkets. This mechanism primarily depends on spatial variations in housing characteristics related to structure, location, and neighbourhood. Housing submarkets are vital in enhancing the precision of housing pricing and analysing the dynamic shifts in the property markets. This study aimed to define and examine the presence of housing submarkets for the terraced properties in Johor Bahru with the Malaysian Valuation and Property Services Department (JPPH) housing transaction database. The database documented 63,036 housing transactions between 2009 and 2018 with thirteen independent structural and locational housing attributes. The study also recommended an objective data-driven methodology by integrating principal component analysis (PCA) and cluster analysis to delineate housing submarkets. Resultantly, the presence of housing submarkets was identified within the property market with the delineation of two specific submarket effects, namely the housing location cluster and housing quality cluster. The submarkets provided a comprehensive framework for segregating property traits into prospective clusters. Establishing housing submarkets may provide valuable insights, implicit cluster details, and a more reliable hedonic price model prediction. The outcomes could be employed by property valuers, analysts, and urban planners for a sound comprehension of current real estate circumstances. Keywords housing submarkets, housing attributes, principal component analysis, cluster analysis, spatial analysis 1. Introduction Property markets substantially facilitate national economies with their feedback relationship. Based on Chin and Chau (2003), the high demand for housing properties would catalyse multiple economic sub-sectoral advancement and property market expansion across urban and suburban areas (Navaneethan, Ismail and Mar Iman, 2009). Given that housing is uniquely heterogeneous following its type, building size, location, neighbourhood, and other relevant characteristics (Thevendran and Jarnell, 2019; Mohd Diah et al., 2014; Yang, 2017), one rule does not apply to all due to subtle variances between each housing. In line with past studies, housing prices could be typically modelled and summarised with physical, spatial, and environmental elements using the hedonic price model (Bourassa, Hoesli and Peng, 2003; Chen et al., 2009; Feng and Jones, 2016). Nevertheless, the model might reflect aggregation bias as housing markets are regarded as aggregates (Rosmera