This research study examines the impact of floods on property values in Kelantan, Malaysia, with a specific focus on terrace houses. Terrace houses, commonly located in flood-prone areas near rivers, face significant challenges due to flood-related damage. The objective of the study is to investigate the effects of floods on terrace house values and identify the factors influencing property prices in flood-prone regions. The research employs a mixed-methods approach, combining quantitative data analysis and a comprehensive literature review. Using a hedonic price model, the study analyzes the relationship between property values and various independent variables, including flood occurrences, overnight policy rates (OPR), employment rates, median income, and population. Data is sourced from reliable organizations such as the Department of Statistics Malaysia, Bank Negara Malaysia, and National Property Information Centre. The findings indicate that floods have a significant negative impact on terrace house values in Kelantan. The regression analysis reveals that flood occurrences and OPR exert a negative influence on property values, while employment rates, income levels, and population positively affect property prices. The model demonstrates a strong fit, with an R-squared value of 0.972, indicating that approximately 97.2% of the variation in property values can be explained by the independent variables. This research contributes to the existing literature by incorporating flood occurrences as an additional variable in the hedonic price model for property valuation. It sheds light on the unique challenges faced by terrace house owners in flood-prone areas and provides insights into the factors influencing property prices in Kelantan. The study emphasizes the significance of government interventions and policies to mitigate flood risks, enhance market resilience, and ensure housing affordability. The findings have practical implications for policymakers, developers, and residents in flood-prone areas. The study recommends the implementation of comprehensive flood mitigation measures, improved infrastructure, and innovative policy interventions to protect property owners and maintain housing affordability. Furthermore, the study suggests further research on long-term property market trends and resilience in flood- prone areas, as well as the perceptions and experiences of property owners. In summary, this research enhances our understanding of the complex relationship between floods and property values, offering valuable insights for policymakers and stakeholders involved in housing and flood risk management.