Assessing Determinants Of Housing Price And Market Equilibrium In Malaysia From 2000 To 2012
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Date
2014
Authors
Yeoh, Bee Leang
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Malaysia had experienced abnormal rapid growth trend as much as 72.4% during
2000-2012:Q2 in housing price index even U.S. Subprime recession period on 2007.
According to central bank of Malaysia, the population’s growth of Malaysia increases
8.12% from 2007 to 2012 thus it should be in line with the increased housing demand.
But, housing price percentage increase 35% during period 2007 to 2012:Q3
comparatively to population growth, which equally to 4.3 times of population growth rate
in Malaysia. Furthermore, National House Buyers Association (HBA) found that housing
market is under oversupply 28%. Hence, the determinants of housing market price had
become a mysterious and high potential existence of housing bubble.
This study using economic fundamental variables such as household income,
interest rate, inflation, and construction cost carry out three type of investigation in
housing market. Firstly, the investigation conducts to identify the determinants of
housing market price within Malaysia. Results of analysis revealed that the fundamental
determinants of housing market price movement had confirmed relationship. Meanwhile,
further investigation to assess monetary policy responsiveness toward housing price
which result of analysis found that government’s monetary policy not affected any
variables but lead by others variables. At the same time, the existence of housing bubble
found within Malaysia housing market within period of 2008:Q3 to 2012:Q4. This result
is in line with the findings of Husain et al (2011) where Klang Valley residential property
market had identified existence of bubble and it had positive and significant relationship
with market housing price and fundamental price.
Description
Keywords
Assessing determinants of housing price , market equilibrium in Malaysia