Analysis of Physical Factors and Housing Reputation Effect to

Property Value in Citra Wisata Residence

C. D. Malahati

, K. A. Fachrudin

and H. T. Fachrudin

Master of Property Management and Valuation Program, Universitas Sumatera Utara, Jl. Dr. Mansyur Campus USU,

Medan

Department of Management, Universitas Sumatera Utara, Jl. Prof. T. Maas Campus USU, Medan

Department of Architecture, Universitas Sumatera Utara, Jl. Perpustakaan Bulding J7 Campus USU, Medan

Keywords: Location, Facility, Design, Environment, Housing Reputation, Property Value.

Abstract: Housing has become a valuable marketing target nowadays, because housing can be used as an investment

in the future in a relatively long time. Deciding the value of a housing property is based on physical

attributes of a housing, such as location, facility, design, environment and housing reputation. Citra Wisata

Residence is one of the oldest housing estates in Medan Johor Subdistrict, with its well-equipped and well

managed housing, the values are increasing. By the increasing growth of new housing in this research area,

Citra Wisata Residence still has a good image and keep its existence until today. The purpose of this

research is to find out and analyze how big the location, facility, design, environment and housing

reputation affect the property’s value. The population of this research were housing residents of Citra

Wisata Residence, and based on Slovin formula, the number of samples are 82. Hypothesis testing uses

multiple linear regression analysis using SPSS and STATCAL at a significance value of 5%. The result of

this research indicate that location, facility, design, environment and housing reputation simultaneously

have a positively and significantly affect the value of Citra Wisata Residence. Partially, facility, design and

housing reputation positively and significantly affect the value of Citra Wisata Residence. Housing

reputation is dominant variable in influencing property value of Citra Wisata Residence.

1 INTRODUCTION

The price of a property is related to the function and

attributes of a housing itself. Some of these

attributes may actually depend on the quality of its

property management. For example, a well-

maintained landscape of a housing is an important

attribute to be considered by the buyer (Hui, 2011).

In residential property, there is one thing that is

important in determining the price and ownership

status of the property, aside from values/points that

has been overlooked in the academic literature,

which is property management (Li and Monkkonen,

2014).

Development of a housing site has an implication

towards a land’s value and price. A land’s value and

price enhancement process does begin with the

progress of a region’s function and role. If

productivity and good transportation cause a region

to progress, the utilization and usage of that region

will also rise intensively and extensively (Hilman,

2004).

Housing is a group of houses that works as a

residential environment that equipped with basic

environmental infrastructures, such as clean water,

waste disposal, electricity, telephones, roads that

allows the housing to function properly; and the

means of environment that act as the supporting

facility which organize and develop the economic,

social and cultural aspects of life, such as

playground facility, sports, education, shops,

transportation facility, security and other public

facilities (Keman, 2005).

There are three major factors required in a

building; strength, function and aesthetics. In order

to provide good building form, there are four major

factors required; aesthetics, structure, layer/skin and

building supplies. A building’s form and design will

affect its selling price. Complexity, skills required

and an up-to-date design like the Mediterranean

1360

Malahati, C., Fachrudin, K. and Fachrudin, H.

Analysis of Physical Factors and Housing Reputation Effect to Property Value in Citra Wisata Residence.

DOI: 10.5220/0010074713601364

In Proceedings of the International Conference of Science, Technology, Engineering, Environmental and Ramiﬁcation Researches (ICOSTEERR 2018) - Research in Industry 4.0, pages

1360-1364

ISBN: 978-989-758-449-7

style, minimalist style or tropical style will create a

high selling price. However, a property can be

considered appealing if the design and form meets

the market’s demand (Tjiptono and Afandi, 2006).

(Tjiptono, 2001) propose about brand image

which is a description about consumer trust an

association to a certain brand. That is why the

development of a brand’s image, especially a

positive one, became an important thing. Because

without strong and positive image, it is very hard for

a company to attract new customers and

retaining/keeping the existing ones, in the same time

asking them to pay a high price.

Currently, housing is a growing property in

Indonesia, especially in Medan. A housing usually

consists of infrastructures that support its resident’s

daily life. In this research, the subject of research is

located in Kecamatan Medan Johor. Housing in this

area is growing rapidly. The housing to be

researched on is Citra Wisata Residence, which is a

middle-upper class housing and has very good

management.

Problems to be included in this research is

whether the location, facility, design, environment

and the reputation of a housing will have an effect

on the value of a property, in this case Citra Wisata

Residence. Goal of this research is to analyze and

find out how big the location, facility, design,

environment and reputation of the housing affect the

value of Citra Wisata Residence, partially and

simultaneously.

2 LITERATURE REVIEW

2.1 Physical Factors

Physical factors can affect the value of land and

buildings on a property. These factors are formed

naturally or by human hands. Naturally, it is formed

from the land itself, such as topography, soil,

climate, air, water, reach and location, plants and

animals, and others. Whereas those formed through

human hands such as the size and area determined,

the shape of the building (design), facilities,

security, public transportation, environmental

conditions, roads and communication (Setiawan,

2006).

Each property unit has its own characteristics

and differentiation, including residential property.

Housing location attributes, building facades and

layout plans, for example, differ from one house to

another. At a greater level, housing will be different

from the others, because it will have a different

environment, different lifestyles, different presence

and many others. These characteristics are the main

primary preferences for consumers when choosing

housing products to live in (Rahadi, 2015).

2.2 Property Value

The dynamics of housing property prices differ

between small, medium and large types of housing.

Housing property prices are viewed from the type of

house which also reflects the different classes of

needs and income in the community. Houses can

become luxury items for small type segments whose

demand is driven by the need to be occupied.

However, this can be different for large types of

requests that will be encouraged other than by the

need for consumption but also investment or even

speculation (Lestariningsih and Basuki, 2014).

Real estate valuation is an important compiler for

every business. Because land and property are

important elements needed for the production of

goods, the value of real estate depends on its

usefulness and therefore demands the product to be

produced. Property values are influenced by a

number of factors including the general economy,

product demand and supply, financial availability,

legal impact, planning systems, physical constraints,

and social elements and other economic systems that

affect the market. Assessment is the process of

determining property values by assessing all enomic,

social, legal, physical and political factors that affect

prices. As a final product, the assessment process

will determine the value of the property market by

estimating the exchange rate, which will be used for

property transactions in the market at a certain time

(French, 2004).

Based on the economic theories of externalities,

the fixed nature of real property implies that the

value of individual properties is partially determined

by the characteristics of the surrounding

neighbourhood and the characteristics of nearby

buildings. Whether real estate development is

followed by an increase in property values depends

on both positive and negative externalities

(Kurvinen dan Tyvimaa, 2016).

3 METHOD

Population of this research is resident in Citra

Wisata Residence consisting 490 families. The

investigated sample are 82 families based on Slovin

formula with margin error 10%. Observation and

questionnaire were used to collect data. Validity and

Analysis of Physical Factors and Housing Reputation Effect to Property Value in Citra Wisata Residence

1361

reliability test are used to test the questionnaire.

Furthermore, SPSS and STATCAL are used to

perform classical assumption test and multiple

regression analysis (Gio, 2015).

4 RESULT AND DISCUSSION

4.1 General View of Citra Wisata

Residence

Citra Wisata residence is one of many well-

organizes residence in Medan Johor area that still

keeping its existence up until now since 1998. The

residence, which was built on ±2 hectares land have

some facility such as public swimming pool, place

of worship, shops, lake, open space/park that

supports the residents daily activities and also the

roads inside the residence is well circulated which

gives easy access for the residents.

4.2 Validity and Reliability Test

4.2.1 Validity Test

The result of 40 questions which consist of 7

questions from the location variable (X

), 9

questions from the facility variable (X

), 12

questions from the design variable (X

), 9 questions

from the environment variable (X

) and 3 questions

from the housing reputation variable (X

) are

considered valid because all of these items meet the

requirements of validating test which is the value of

Corrected Item Total Correlation > 0.361 (R Table).

4.2.2 Reliability Test

Reliability test was done to valid questions. If the

Alpha Cronbach value is bigger than 0.8 then the

research questionnaire is reliable (Augustine and

Kristaung, 2013). It is known that the questionnaire

is reliable because the Alpha Cronbach value is

bigger than 0.8. Table 1 is displayed reliability test.

Table 1.Reliability test

Variable Cronbach Al

ha Result

Location 0.971 Reliable

Facilit

0.972 Reliable

Design 0.972 Reliable

Environment 0.971 Reliable

Housing

Reputation

0.972 Reliable

4.3 Classical Assumption Test

4.3.1 Residual Normality Test

The assumption test of normality uses Kolmogorov-

Smirnov test. Based on the result of normality test

with Kolmogorov-Smirnov test, the value of p-value

(p) is 0.141 which is greater than significance level

0.05, then normality assumption of residuals is

satisfied.

4.3.2 Heteroscedasticity Test

Heteroscedasticity test uses Glejser test. Based on

Glejser test in Table 2, all values of Sig Glejser for

each independent variable < 0,05. Therefore there is

no heteroskedasticity.

Table 2. Heteroscedasticity Test with Glejser Test

Coefficients

Model

Unstandardiz

Coefficients

Standardiz

Coefficient

t Sig.

Std.

Erro

Beta

(Constant) -.332 .242

1.375

.173

Location

)

-.029 .043 -.078 -.684 .496

Facility (X

) .003 .036 .012 .092 .927

Design (X

) .057 .042 .185 1.365 .176

Enironment

)

.047 .045 .116 1.052 .296

Housing

Reputation

)

.058 .032 .240 1.842 .069

a. Dependent Variable: Glejser_Heteroskedasticity

4.3.3 Multicollinearity Test

Multicolinearity test uses variance inflation factor

(VIF). The expected VIF is less than 10 indicating

there is no multicolinearity symptom. Based on the

multicolinearity test result in Table 3, VIF for each

independent variable are less than 10 indicating

there are no multicolinearity symptom.

Table 3.Multicolinearity Test with VIF

Variable VIF Conclusion

Location 1.173

multicollinearit

Facilit

1.460 No

ICOSTEERR 2018 - International Conference of Science, Technology, Engineering, Environmental and Ramiﬁcation Researches

1362

multicollinearit

Design 1.654

multicollinearit

Environment 1.095

multicollinearit

Housing

Reputation

1.522

multicollinearit

4.4 Hypothesis Testing

4.4.1 Multiple Linear Regression

In this research, multiple linear regression is used to

test the hypothesis. This method is used to analyze

the magnitude of influence between independent

variable of location (X

), facility (X

), design (X

environment (X

), and housing reputation (X

) to

dependent variable (Y) that is property value. Table

4 is displayed the result.

Table 4. Multiple Linear Regression Result

Variabel Sig. Result

Location 0.686

ot Significant

Facilit

0.046 Significant

Desi

n 0.047 Si

nificant

Environment 0.603

ot Si

nificant

Housin

utation 0.044 Si

nificant

1) Simultaneously Test (F test)

Based on simultaneously test with F test, the

value of Sig. is 0,000 and the value of F statistic is

7,444. Since Sig. 0,000 < 0,05 and F statistic 7,444 >

2,334 (F critical value), then the simultaneous effect

from all of the independent variables (location,

facility, design, environment, housing reputation)

statistically significant to the property value.

Y = 0,154 + 0,028X

+ 0,115X

+ 0,133X

0,037X

+ 0,103X

+ e

2) Partial Test (t Test)

Based on partial test with t test in Table 4 :

1. H

: The regression coefficient of location is

0,028 with Sig. 0.686 > significance level 0,05,

then location does not have significant effect

on property value. It means that the hypothesis

is rejected.

2. H

: The regression coefficient of facility is

0,115 with Sig. 0.046 < significance level 0,05,

then facility has significant effect on property

value. It means that the hypothesis is accepted.

3. H

: The regression coefficient of design is

0,133 with Sig. 0.047 < significance level 0,05,

then design has significant effect on property

value. It means that the hypothesis is accepted.

4. H

: The regression coefficient of environment

is 0,037 with Sig. 0.603 > significance level

0,05, then environment does not have

significant effect on property value. It means

that the hypothesis is rejected.

5. H

: The regression coefficient of housing

reputation is 0,103 with Sig. 0.044 <

significance level 0,05, then housing reputation

has significant effect on property value. It

means that the hypothesis is accepted.

3) Coefficient of Determination

The value of coefficient determination (R

) is

0,329. It means that location, facility, design,

environment and housing reputation can affect

property value as 32,9%, with 67,1% for other

factors.

5 CONCLUSIONS

Property value of Citra Wisata Residence is affected

by variables such as facility, design and residence

reputation that can be seen from the result of this

research, which concluded that those three variables

have a positive and significant impact to property

value. Can be said that the main thing that the

respondents seek is the comprehensiveness of the

facility inside the residence, design, and also the

impression of the house when choosing the desired

residence.

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