Blocked Views, Rising Prices: The Condo Paradox
Imagine a condominium development where one side of the building faces an upcoming construction project that will eventually block what was once an open view. Conventional wisdom suggests that property values on that side should weaken, and agents on the ground report that these units are generally less desirable, attract fewer enquiries, and often take longer to sell.
Nevertheless, more than a year after the neighbouring development was announced, median prices reported on property portals for a particular condominium have continued to rise. This article explains why. While buyers tend to discount units affected by blocked views, units on the opposite side with open vistas become relatively scarcer and more sought after. Attractive facilities such as landscaped gardens, swimming pools, and modern gyms may compensate for the loss of a view, but purchasers place considerable importance on views and privacy when making a buying decision.
As a result, a two-tier market can emerge within the same development, with open-view units attracting stronger demand and supporting higher prices, while units facing construction experience softer demand despite benefiting indirectly from rising median prices across the development
The Median Price Puzzle
Property portals record median prices for the entire development, alongside lower and upper percentiles. Median prices are not segmented by unit orientation.
Thus, when owners of better-view units sell their units at higher prices due to scarcity, these higher transactions dominate and result in a higher median. When the median rises, it sets a psychological benchmark.
Ironically, even the blocked-view units benefit from this statistical uplift. Sellers of obstructed units can point to data on property portals as justification for higher asking prices. Buyers often anchor their offers to the median, so asking prices for obstructed units creep upward, even if final negotiations settle slightly lower. The gap between blocked and unobstructed views narrows. Recently, I looked at the transactions of units on the side facing the upcoming construction. They have increased considerably when compared to last year, when the development was announced.
However, this advantage can go the other way. If owners of blocked units panic and sell at low prices, those transactions will drag down the median. Premium-view units may be affected if too many units are sold at low prices, dragging the median down. Distressed or discounted sales can ripple across the development. In this particular development, I don’t see this happening as it is a high-end luxury condo and most owners have strong holding power. Generally, if the development is mostly owner occupied, there would be fewer distressed sales as owner occupiers are more tolerant.
Valuation vs. Property Portals
Professional valuers using the comparison method do not solely rely on median prices. They omit outliers, unusually high or low transactions, and focus on the majority of sales clustered around a realistic market level.
Property portals, however, includes all transactions in its median calculation. Outliers can distort the picture. High outliers are normally units sold to special purchasers, or those in pristine, renovated condition. Low outliers are normally sales due to distressed situations, units in poor condition, or with undesirable renovations.
Thus, data on property portals reflects the raw market without professional filtering. For owners, this means the reported median condo prices may not align with formal property valuation methods, yet they strongly influence buyer psychology.
It is also important to understand the nuances of property portal reporting, as different portals may use different transaction periods when calculating median prices. A portal that relies on a shorter transaction window can show a higher median if just a handful of recent sales were concluded at strong prices. Contrary to popular belief, a high median does not necessarily require a large number of transactions; a few high-value sales may be sufficient to push the median upward.
In practice, buyers often rely on the median prices displayed on property portals and their real estate agents’ recommendations, rather than commissioning a valuation report to estimate the market value. Typically, buyers engage property valuers only after signing the Sale and Purchase Agreement (SPA), since banks require a formal valuation to process housing loans. If the valuation market value is lower than the SPA price, the approved loan amount will be reduced, and the buyer would have to top up the difference in cash.
This sequence highlights how market perception and portal medians, rather than valuation methodology, often drive pricing decisions in the early stages of condo transactions in Malaysia.
Strategic Pricing for Owners
Because publicly available transaction data are not the most current, relying solely on these records can result in pricing decisions that do not accurately reflect the market. Owners should therefore supplement published transaction data with real-time market intelligence by speaking to reliable agents who have recently concluded sales within the development. These agents often possess valuable insights on current buyer sentiments, ongoing negotiations, rejected offers, and achievable selling prices that have yet to appear in public records.
Informal sources of information can be equally useful. Neighbours, residents’ groups, and active owners sometimes become aware of transactions and asking prices before they are officially reported. It is also essential to analyse transactions according to unit orientation rather than treating the entire development as a single market. Current asking prices should also be monitored as they provide a useful barometer of seller expectations and market sentiment, even though they do not typically reflect final selling prices.
A sensible approach is to begin with a slightly higher asking price and gauge market response. If enquiries, viewings, and offers are limited, sellers may need to adjust the price gradually. Conversely, if buyer interest is strong and multiple parties are making enquiries, sellers may have room to hold firm or even revise expectations upwards. Effective pricing is an ongoing process of interpreting transaction evidence, understanding buyer preferences, and responding to changing market conditions.
The Broader Lesson
The example discussed in this article highlights how development-wide median prices can continue to increase even when units facing future construction become harder to sell. They ride the wave of rising median prices generated by better-facing units, allowing sellers to raise asking prices and achieve higher sale prices than might otherwise be expected. A well-maintained development with efficient unit layouts and quality common facilities is often better able to withstand the negative effects of market changes, as buyers may still be drawn to its overall living environment and long-term appeal.
Don’t interpret property statistics in isolation. Median prices reported by property portals provide a useful benchmark and often influence buyer expectations, but they are only one part of the pricing equation. Buyers also compare a condominium with nearby developments offering similar sizes, facilities, accessibility, and overall living environments. As a result, even a unit with a premium open view may struggle to attract offers if it is priced above comparable alternatives.
Professional valuers analyse comparable transactions and normally exclude anomalous sales when estimating market value, whereas buyers often rely on portal data, market sentiment, and agents’ recommendations.
For that reason, purchasers may find it useful to obtain either a formal valuation or an indicative opinion of value before signing an offer to purchase. However, valuation is not an exact science, and different valuers can arrive at different conclusions. In my own experience, I have encountered properties that ultimately sold at prices higher than valuation estimates. This does not mean the valuations were wrong, as valuation is an estimate of market value based on the evidence available at the time.
Nonetheless, I would recommend engaging an experienced valuer who can analyse the property’s characteristics, market conditions, and comparable transactions to arrive at a well-supported opinion of value.
Ultimately, a property’s achievable price depends on a combination of factors such as views, unit orientation, competing supply, and prevailing market sentiment, in addition to portal statistics.
