Housing Prices In Malaysia Research Articles

Affecters on Housing Prices: An Initial Review in Malaysia

This research delves into the intricate dynamics of the Malaysian housing market. Due to the issue of constantly high and expensive house prices, the study aims to integrate the possible macroeconomic causes as well as the integrity issue by focusing on three vital independent variables: Gross Domestic Product (GDP), Foreign Direct Investment (FDI), and Corruption Index (CRP). The research uses quantitative methods, the Ordinary Least Squares (OLS), to reveal nuanced correlations between these economic variables and house prices in Malaysia. The intriguing findings show that both FDI and CRP significantly influence house prices positively, aligning with existing literature. However, the unexpectedly insignificant correlation between GDP and house prices suggests a potential gap in understanding, adding a layer of intrigue to the research. These results and significant findings offer valuable insights for decision-makers and emphasize the importance of ongoing research to better grasp the complex factors shaping housing markets in different economic situations.

Determinants of Housing Prices

The purpose of this research is to study the determinants of housing prices in Malaysia and Singapore. The research analyses the relationship between the housing price index with four other macroeconomic variables which are gross domestic product, interest rate, inflation rate and unemployment rate. The methodology that is used in this research is the multiple linear regression analysis. This research also performs diagnostic checking through normality test and multicollinearity test. The data is collected from the World Bank and the Bank for International Settlements covering the period of 1979 to 2019. The results revealed that for both Malaysia and Singapore, gross domestic product is significantly related to housing price. Apart from the relationship between inflation rate to housing price, Malaysia and Singapore’s macroeconomic variables (GDP, interest rate, and unemployment rate) are similarly related to housing price. Policymakers in charge of macroeconomic policies should take heed that these macroeconomic indicators have an impact on housing price, as shelter is one of the basic needs of citizens.

Determinants of house prices in Malaysia

PurposeThis paper aims to empirically examine the relationship between macroeconomic factors and housing prices in Malaysia from 1991 to 2016.Design/methodology/approachThis study was based on annual macroeconomic data from 1991 to 2016. For the model that was constructed, house prices were treated as the dependent variable and other variables, namely, the interest rate, the gross domestic product (GDP) and the consumer price index (CPI) as explanatory or regression variables. All these data come from the annual publication of the World Bank’s statistical report. In the meantime, data on house prices have been obtained through the publication of the National Property Information Centre in the form of an index. In the study, the bounds testing approach for cointegration was used because the Engel Granger cointegration tests can be used only if all the series are stationary at first difference. And it is against this background the author could not use it because our variables are a combination of series integrated of orders I (0) and I (1).FindingsThe results of this study revealed a positive equilibrium relationship in the long run between interest rate, CPI and housing prices and negative for the GDP. In addition, in the short run, housing prices were shown to have a positive relationship with GDP and CPI, but no relationship with the interest rate, based on the assumption that “all other things being equal”.Research limitations/implicationsThe data on economic factors (GDP, RI and CPI) used in this study are secondary and not from the Malaysian Department of Statistics and Economic Studies. Furthermore, the result of this research only reflects the Malaysian reality, and therefore, cannot be generalised to the entire housing market worldwide.Practical implicationsThe result of this study can be used for housing valuation by Malaysian property market players, investors and especially policymakers.Social implicationsThis study’s findings can help Malaysian policymakers to limit the high price fluctuation in the housing industry and help Malaysian citizens to buy their own homes at a reasonable price.Originality/valueThe contributions of this study are structured around two points. The first is the contribution to the body of knowledge, where the results of the study will contribute to the growing number of literature in the housing sector. Moreover, the second contribution of this document is the strength of its recommendation to policymakers. This is because it analyses only the main macroeconomic determinants (IR, GDP and CPI) that are essential to better influence the housing sector as quickly as possible, as opposed to those that use many variables that could lead to possible specification errors.

Architectural Design in Rethinking the Future of Co-Housing in Malaysia

Co-housing is a collaborative housing concept designed to foster close social bonding and sustainable communities. With the rapid population growth, urban sprawls and housing prices in Malaysia, this concept has gained traction in the housing sector as a viable housing alternative to the existing property market due to its social, economic and sustainability benefits. This paper aims to establish a set of design best practices by conducting a qualitative study on three selected Malaysian co-housing locations and design providers (DP). The methodology consists of interviews, literature reviews and case studies where data gained from the interviews are reviewed with data from the literature and case studies. The resulting analysis recommends that co-housing should focus on the following design aspects: demography size, surrounding context, spatial configuration, space design, “environmental psychology theory” and sustainability considerations. This paper concludes by providing several potential co-housing issues and recommendations for enhancing the benefits of co-housing in Malaysia.

Causal effects of immigration inflows on house prices in a traditionally non-destination country

PurposeThe purpose of this study is to examine the causal impact of international immigration inflows on housing prices at the state level in Malaysia from 2007 to 2018.Design/methodology/approachHedonic regressions using both fixed effects and first difference approaches are used to estimate the impact of immigration inflows on house prices in Malaysia. This study deals with potential endogeneity of immigrants’ choices of destination states in Malaysia by using a shift-share instrument variable approach. Specifically, historical shares of immigrants in a state are used to predict current immigrant inflows to a particular state. The predicted value of immigration flows is then inserted into the house price regression models in place of the actual immigration flows.FindingsUsing annual data for 14 states from 2007 to 2018, this study documents the positive impact of immigration inflows on house prices in Malaysia. The authors find that a 1% increase in immigration inflows is associated with an increase of 10.2% (first difference) and 13.4% (fixed effects) in house prices. The economic impact is larger in magnitude than that found in developed countries. Contrary to existing studies that find immigration inflows to be associated with native flight, the authors find support for the attraction effects hypothesis, where immigration inflow is positive and significantly related to net native flows.Research limitations/implicationsThe effects of immigration inflows are economically significant, considering that the effects are 10 times larger than those documented in the USA. Policymakers in Malaysia ought to monitor house price trends in immigrant-popular states to ensure that natives are not priced out by new immigrants.Originality/valueTo the best of the authors’ knowledge, this is perhaps the first study to focus on the relationship between immigration inflows and house prices in Malaysia. Focusing on Malaysia has at least two originality aspects. First, Malaysia is relatively not an immigrant-popular destination. Second, Malaysia has a multiracial and heterogenous society among its natives. The findings, obtained within these two settings, would therefore provide a wider scope of result generalization, and natural experiment grounds for causal implications of our results.

THE IMPLICATIONS OF GUARDED NEIGHBORHOOD ON HOUSING PRICES IN URBAN MALAYSIA

The research on gated communities has drawn considerable attention over the last three decades as researchers identify why certain social groups of people choose to live in a fortified neighborhood. Many scholars ranging from urban geographers, urban planning, anthropologist, urban economists, sociologists to urban politics have attempted to explore the reasons behind the proliferation of gated communities throughout the world. However, less research talked about the impacts of enclosure developments on housing prices, especially in developing countries like Malaysia. Therefore, this article will examine the various actors' perceptions of guarded neighborhoods' implications towards housing prices in urban Malaysia. This article found that various actors interviewed believe that guarded neighborhoods can improve the housing prices in Malaysia. This article contributes to the general understanding of Malaysia's guarded neighborhood and has multiple implications in terms of housing prices in enclosure developments.

The Determinants of House Prices in Malaysia

This paper studied how house prices were affected by macroeconomic factors from Q1 2009 to Q4 2018. The short and long-run effects of real income, nominal interest rates, inflation rate and stock prices on house prices in Malaysia were examined with the autoregressive distributed lag (ARDL) of a restricted error correction model (ECM). It was discovered that the selected macroeconomic factors were cointegrated with house prices. Income, represented by real Gross Domestic Product (GDP), significantly affected house prices in the short and long-run. Inflation and interest rate, proxied by Consumer Price Index (CPI) and Overnight Policy Rate (OPR), respectively, affected house prices significantly in the long-run. The stock market, tracked by Kuala Lumpur Composite Index (KLCI), had no significant impact on house prices signifying no wealth effect. Through the findings of an inelasticity of demand and an undesirable result of monetary policies, this paper concluded that more effective solutions needed to be carried out to ensure affordability of house ownership in Malaysia.

Sentiments in the housing market and the effectiveness of government interventions

ABSTRACT This paper examines the factors that drive the recent growth of house prices in Malaysia. By constructing a housing market sentiment index, we find contemporaneous sentiment to have a strong influence on future housing market returns especially in the short term. Government-introduced cooling measures were ineffective in dampening prices and market sentiment. We also find property developer behaviour to drive sentiments and prices. The study contributes to literature by providing an easily generalizable method of constructing a housing market sentiment index in other countries besides giving clear indication of the drivers of house prices and sentiment for more effective government intervention.

The Effect of Ageing Population on House Prices in Malaysia. An Autoregressive Distributed Lag (ARDL) Cointegration Approach

The Effect of Ageing Population on House Prices in Malaysia. An Autoregressive Distributed Lag (ARDL) Cointegration Approach

Macroeconomic Determinants of House Prices in Malaysia

House prices in Malaysia are considered to be seriously unaffordable as the median all-house price is relatively higher than the annual median income. Although the issue of house prices is prevalent in the country, few studies have been done to determine factors that influence its movement. The current paper, therefore, attempts to investigate the causal relationship between macroeconomic variables and house prices in Malaysia by accounting for the existence of a structural break for the variables. It is identified that in the long run, macroeconomic variables are collectively significant in influencing house price movement while the individual impact of macroeconomic variables is varied. The rise in the level of interest rates, housing supply, and inflation will result in the decline in house prices while gross domestic product and local currency appreciation cause the price to increase. It was found that stock prices do not significantly influence house prices. Of all the macroeconomic factors analyzed, exchange rate fluctuations appear to be most significant in explaining the movement of house prices. In the short-run, all macroeconomic factors are individually significant in influencing house prices and it is also identified that house prices tend to move back into their long-run state after temporary macroeconomic shocks with the speed of adjustment around 5.2 percent quarterly. It is advised for the policymakers to constantly monitor the movement of macroeconomic factors and take necessary actions to cushion the adverse impact of the movement of house prices in the country.

Factors Affecting Housing Prices in Malaysia: A Literature Review

Housing prices or the value of houses in Malaysia have fluctuated significantly in the last decade. This sort of indecisions creates an obvious effect on the people who wish to invest or buy housing in Malaysia. Many researchers had argued in the past that housing prices are closely related to the affordability of buyers to own a house, therefore the government plays a vital role in ensuring the housing prices of Malaysia are at par with the income levels. As such, the current study aims to discuss on several factors which affect housing prices in Malaysia. The study had identified several factors, namely foreign direct investment (FDI), gross domestic product (GDP), interest rate, unemployment and inflation for purposes of discussion. Hence, it is important to understand the factors affecting the housing prices in Malaysia for government and policy makers to make decisions. This study is made to provide answers for factors affecting Malaysia’s house prices.

Estimating the impact of crime risk on housing prices in Malaysia

PurposeThe purpose of this study is to examine the impact of crime risk on housing prices at a national level in Malaysia during the period from 1988 to 2016.Design/methodology/approachA hedonic regression approach was used to estimate the Malaysian households’ valuation for crime risk. Specifically, the state-level property index on the state-level reported crime rate was regressed while controlling for state-level socioeconomic variables. The macroeconomic panel nature of the data set provides the merit to use a panel dynamic model instead of the traditional static panel data techniques (fixed effects or first difference).FindingsPanel dynamic estimators consistently show a negative impact of crime risks on housing prices. The estimated elasticity of housing prices with respect to crime risks ranges from −0.141 to −0.166, in line with existing literature using micro level data. In fact, householders in crime hotspot states are willing to pay more for crime reduction compared to householders in non-hotspot states. The willingness to pay has also increased since the implementation of nationwide crime reduction plans in 2010.Research limitations/implicationsThis is the first study that has examined the Malaysian people’s willingness to pay to reduce crime. This information is important in determining the optimal level of government expenditures for public safety.Originality/valueThis is the first study to examine the relationship between crime rates and housing prices in Malaysia. This study contributes to the literature by examining the impact of crime rates on housing prices at a national level by using panel dynamic models. The macro level data results are consistent and complement the existing literature based on micro level data.

Housing prices in peninsular Malaysia: supported by income, foreign inflow or speculation?

PurposeThis paper is motivated by a concern about the ability of the average Malaysian income to catch up with the rapidly increasing house prices in Peninsular Malaysia. Financial innovation in financial system now regards houses as a financial asset and speculation vehicle. Therefore, a house purchase is made to acquire not merely a necessity but also a financial asset which can generate future returns. Given the problems in the housing market, this paper aims to examine the determinants of house prices in Malaysia, including those such as income, population, foreign inflow and speculation.Design/methodology/approachThis study adopts panel data analyses, namely, the fixed effect model (FEM) and the pooled mean group (PMG), and uses data at state level in quarterly frequency, spanning from 2005Q1 to 2013Q4.FindingsBased on the results of FEM, these determinants influence house prices significantly. Moreover, the PMG results suggest that there is convergence in the model, which are indicated by the significant and negative sign of the error correction term. In conclusion, the rapidly increasing house price is not caused by speculation activities in the housing market. More precisely, Malaysian income is capable of catching up with the increasing house prices.Practical implicationsAs income remains to be one of the major drivers in influencing Malaysian house price, Malaysian Government shall continue the policies of supply low cost houses to the low-income groups and My First Home Scheme (SRP) by offering less stringent rules in applying house loan for the first-time house buyers.Originality/valueThis study used the actual data of foreign housing purchase obtained from Malaysia Valuation and Property Services Department to represent foreign inflow; therefore, the results will reflect the impact of foreign inflow in a better manner.

Housing Inflation: Policy Guidelines from Shariah Perspective

The soaring housing prices in Malaysia is not a recent issue. It is a global phenomenon especially in developing and developed countries, driven by factors including land price, location, construction materials cost, demand, and speculation. This issue demands immediate attention as it affects the younger generation, most of whom could not afford to buy their own house. The government has taken many initiatives and introduced regulations to ensure that housing prices are within the affordable range. This article aims to introduce a housing price control element from the Shariah perspective, as an alternative solution for all parties involved in this issue. It adopts content analysis methodology on policy from Shariah approved sources.

The Dynamics of Housing Prices in Malaysia: Findings from Focus Group Discussions

Background of the Research: This study examines the factors influencing housing prices in Malaysia. The study explores qualitatively whether there is housing bubble in Malaysia, and whether the housing prices are associated with changes in construction cost, land cost, compliance cost, housing speculation, and mortgage rate. Methodology: The paper is exploratory in nature. The data were collected via focus group discussions among nine property industry players in Malaysia and were analysed using qualitative research methodology. Main Findings: The study reaches the qualitative outcomes that rising housing prices are mainly due to cost factors and housing speculation but may not necessarily be influenced by mortgage rate. The findings suggest that the residential property market is currently not facing housing bubble issue. However the problem is partly due to PTPTN blacklisted borrowers. Conclusion: It is imperative for the Malaysian government to put in further efforts to control housing prices in order to maintain affordability of homeownership.

INTRODUCTION TO SPECIAL ISSUE 4 : 2017

This issue of Planning Malaysia Journal includes a mixture of articles addressing various issues in contemporary urban planning. Article 1 raises the question of whether green initiatives in educational institutions, especially universities, were successful in producing green graduates. A survey among green and non-green universities students showed that there is no significant difference in the level of perception, attitude and responsible environmental behaviour between green and non-green universities graduates. Thus, it suggests that students’ involvement in universities’ green initiatives should be increased.Article 2 discusses the impacts of street urban design on the perceived safety by women respondents. As women’s role in the cities becoming more pronounced, the authors suggest that streets and urban design should consider the safety of women so that street can become a safe and highly utilised public space. Article 3 looks at the factors affecting house prices in Malaysia in order to determine the alternative benchmark for Islamic home financing scheme. It shows that house price index are influenced by economic growth, demand for housing loan and construction materials. Article 4, in the meantime, compares the Islamic home financing schemes on offer in Malaysia nowadays, and suggest that there is a need for banks to move on from the Al-Bay Bithaman Ajil to Musharakah Mutanaqisah Partnership housing financing scheme.Article 5 looks how innovative management of natural resources leads to increased participation of the local community and improved revenue for rural businesses. These, in turn, motivates local stakeholders to continue preserving the resources. Article 6 examines the practices regarding food waste management in hotels in Langkawi. It found that there was a lack of emphasis from the hotels on their policy related to wastage of food and unsustainable food consumption pattern by their guests. This reflects on the lack of practices towards sustainable food waste management by the hotel sector.Article 7 identifies changes and threats to Malay landscape preservation in traditional Malays houses in Melaka and Kelantan. It concludes that threats to such preservation include inappropriate use of garden space, problems regarding house ownership, inadequate fund for maintenance, and current development trend that leads to traditional Malay garden setting being replaced by modern setting.Article 8 discusses the use of agroforestry approach to improve sustainability of oil palm smallholdings. Rapid development and expansion of natural forest into oil palm land has decreased the agricultural sustainability of Malaysian oil palm production. However, the article shows that sustainability of oil palm smallholdings can be improved through agroforestry, which at the same time was found to also improve income of the smallholders.

INTRODUCTION TO SPECIAL ISSUE 4 : PLANNING MALAYSIA JOURNAL

This issue of Planning Malaysia Journal includes a mixture of articles addressing various issues in contemporary urban planning. Article 1 raises the question of whether green initiatives in educational institutions, especially universities, were successful in producing green graduates. A survey among green and non-green universities students showed that there is no significant difference in the level of perception, attitude and responsible environmental behaviour between green and non-green universities graduates. Thus, it suggests that students’ involvement in universities’ green initiatives should be increased.Article 2 discusses the impacts of street urban design on the perceived safety by women respondents. As women’s role in the cities becoming more pronounced, the authors suggest that streets and urban design should consider the safety of women so that street can become a safe and highly utilised public space. Article 3 looks at the factors affecting house prices in Malaysia in order to determine the alternative benchmark for Islamic home financing scheme. It shows that house price index are influenced by economic growth, demand for housing loan and construction materials. Article 4, in the meantime, compares the Islamic home financing schemes on offer in Malaysia nowadays, and suggest that there is a need for banks to move on from the Al-Bay Bithaman Ajil to Musharakah Mutanaqisah Partnership housing financing scheme.Article 5 looks how innovative management of natural resources leads to increased participation of the local community and improved revenue for rural businesses. These, in turn, motivates local stakeholders to continue preserving the resources. Article 6 examines the practices regarding food waste management in hotels in Langkawi. It found that there was a lack of emphasis from the hotels on their policy related to wastage of food and unsustainable food consumption pattern by their guests. This reflects on the lack of practices towards sustainable food waste management by the hotel sector.Article 7 identifies changes and threats to Malay landscape preservation in traditional Malays houses in Melaka and Kelantan. It concludes that threats to such preservation include inappropriate use of garden space, problems regarding house ownership, inadequate fund for maintenance, and current development trend that leads to traditional Malay garden setting being replaced by modern setting.Article 8 discusses the use of agroforestry approach to improve sustainability of oil palm smallholdings. Rapid development and expansion of natural forest into oil palm land has decreased the agricultural sustainability of Malaysian oil palm production. However, the article shows that sustainability of oil palm smallholdings can be improved through agroforestry, which at the same time was found to also improve income of the smallholders.

Can the Housing Policies Sustain House Prices in Malaysia?

In addition to economic factors, this paper examines the impact of housing policies in sustaining house prices in Malaysia at both aggregate and disaggregate levels. By using autoregressive distributed lag (ARDL) framework, we develop a model of house price determination with a focus on two major housing policies–mortgage interest tax relief (MITR) and Developer Interest Bearing Scheme (DIBS). Although aggregate house prices do not react to any economic variable in the long run, it responds positively to interest rate and DIBS in the short run. At the disaggregate level, population and housing stock influence house prices in the long run. Nonetheless, MITR and DIBS have a statistically significant positive impact on the price of high-rise houses. We conclude that while demand and supply variables are important determinants of house prices in the long run, house price changes are affected by housing policies in the short run. For policy recommendation, we suggest to strictly prohibit DIBS to ensure a stable growth in the housing market. Besides that, MITR should be implemented to ensure housing affordability and to stimulate the housing market during recession.

Empirical Analysis of House Price Bubble: A Case Study on Malaysia

The main objective of this research is to investigate the relationship between house price with macroeconomics variables - Gross Domestic Product per capita, inflation rate, Base Lending Rate and amount of household loan disbursed for purchase of residential properties. We try to use these variables to examine if they could trigger a housing bubble to burst in Malaysia. Granger Causality results show that there is univariate relationship from house price to Gross Domestic Product per capita. Though house price and other macroeconomics variables do not Granger–cause each other in short run, but these variables are cointegrated in the long run, i.e. there is no evidence of house price bubble in Malaysia. We suggest that soaring house prices in Malaysia is being supported by the large inflow of foreign funds into the housing sector and the unresponsive supply of houses.

Review of Building, Locational, Neighbourhood Qualities Affecting House Prices in Malaysia

Abstract Housing was measured based on their qualities and condition, but their indicators are often not published. The qualities of these are the building, locational and neighbourhood conditions. These factors are not reviewed directly as indicators affecting house prices. The quality of life should, therefore, must be easier to determine. These are important to consider, so their impact on house prices are quantifiable. The outcome of these condition are three-set indicators, and established methods or techniques of measurement can be reviewed. These conditions must able to measure for their qualities deemed necessary for the factors affecting house prices.