Empirical Analysis of Factors Influencing Residential Property Prices in Malaysia

Authors

  • Nazaria Md Aris lecturer

DOI:

https://doi.org/10.33736/uraf.1215.2018

Abstract

This study concerns the factors influencing the prices for residential properties in Malaysia as well as their relationship towards residential property prices. The data collected and analysed in this research is from quarter one year 2000 to quarter four year 2015. Various determinants have been identified namely country population, Gross Domestic Product, household income, inflation and lending rates in this research. The time-series analysis methodologies adopted in this research are the Augmented Dickey-Fuller (ADF) and Philip-Perron (PP) test for unit root, Johansen and Juselius Cointegration Test, Granger Causality Test for Vector Error Correction Model (VECM) and also Variance Decomposition (VDC).  In this study, these two variables, population growth (POPGROWTH) and inflation measured by the consumer price index (CPI) were found has a significant and positive effect towards the price of residential properties in Malaysia.

References

Aziz, W. N. A. W. A., Hanif, N. R., & Singaravello, K. (2011). Affordable housing within the middle income households in Malaysia: Challenge to enter homeownership. Australian, Journal of Basic and Applied Sciences, 5(8), 258-67

Bujang, A., Jiram, W. A., Zarin, H. A., & Jaafar, M. N. (2015). Factor affecting the housing financing of bumiputera in Iskandar Malaysia. Journal of Economics, Business and Management, 3(11), 1031-1036.

https://doi.org/10.7763/JOEBM.2015.V3.329

Guo, M., & Wu, Q. (2013). The empirical analysis of affecting factors of Shanghai housing prices. International Journal of Business and Social Science, 4(14), 218-223.

Hashim, Z. A. (2010). House price and affordability in housing in Malaysia, Akademika, 78, 37-46.

Hui, H. C. (2013). Housing price cycles and aggregate business cycles: Stylised facts in the case of Malaysia. The Journal of Developing Areas, 47(1), 149-169.

https://doi.org/10.1353/jda.2013.0016

Ismail, S., Jalil, I. N., & Muzafar, M. M. (2015). Making housing affordable. Kuala Lumpur, Malaysia: Khazanah Research Institute.

Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2-3), 231-254.

https://doi.org/10.1016/0165-1889(88)90041-3

Kang, H. H., & Liu, S. B. (2014). The impact of the 2008 financial crisis on housing prices in China and Taiwan: A quantile regression analysis. Economic Modelling, 42, 356-362.

https://doi.org/10.1016/j.econmod.2014.07.018

Nellis, J. G., & Longbottom, J. A. (1981). An empirical analysis of the determination of house prices in the United Kingdom. Urban Studies, 18(1), 9-21.

https://doi.org/10.1080/00420988120080021

Ong, T. S. (2013). Factors affecting the price of housing in Malaysia. Journal of Emerging Issues in Economics, Finance and Banking, 1(5), 414-429.

Pour, M. S., Khani, P. N., Zamanian, G., & Barghandan, K. (2013). Specifying the effective determinants of house price volatilities in Iran. Economic Review: Journal of Economics & Business/Ekonomska Revija: Casopis za Ekonomiju i Biznis, 11(2), 15-20.

Tan, T. H. (2010). Base lending rate and housing prices: Their impacts on residential housing activities in Malaysia. Journal of Global Business and Economics, 1(1), 1-14.

Xu, L., & Tang, B. (2014). On the determinants of UK house prices. International Journal of Economics and Research, 5(2), 57-64.

Zandi, G., Mahadevan, A., Supramaniam, L., Aslam, A., & Theng, L. K. (2015). The economical factors affecting residential property price: The case of Penang island. International Journal of Economics and Finance, 7(12), 200-210

https://doi.org/10.5539/ijef.v7n12p200

Downloads

Published

2018-12-31

How to Cite

Md Aris, N. (2018). Empirical Analysis of Factors Influencing Residential Property Prices in Malaysia. UNIMAS Review of Accounting and Finance, 2(1). https://doi.org/10.33736/uraf.1215.2018

Issue

Section

Articles