Determinants of homeownership in Malaysia

Abstract

The housing industry is crucial to the sustainable development in Malaysia. The efficiency and effectiveness of the housing delivery system requires housing provision for all. The housing industry, which had grown rapidly in the 1980s encountered property oversupply recently. The majority of these units remain unsold for reasons beyond price factor, ranging from poor location to unattractive houses. The main objective of this paper is to tackle property oversupply in the country by examining a detailed knowledge of home owning determinants. Homeownership should be encouraged as positive externalities of homeownership can be found in many housing surveys. Homeownership is a complex issue that is the result of many determinants, including housing characteristics (house types and property types), employment and income trends, sociocultural and demographic descriptors. In addition to determinants, efforts needed to reduce regulatory barriers in the housing delivery system that can significantly increase the cost of producing houses. The government should make home financing more available and affordable by providing subsidies to low income families and creating incentives to save for homeownership. Efforts also needed to extend opportunities to enhance the affordability of homeownership by liberalizing rules and regulation of Employee Provident Fund (EPF) withdrawal.

Meeting first-time buyers’ housing needs and preferences in greater Kuala Lumpur

“…However, Tan (2008) showed that employees from publicly-owned organizations consider ownership of a home as an investment tool for wealth accumulation. Tan (2008) further argued that employees from publicly-owned organizations are motivated to improve the quality of the neighborhood by holding a leading position in the local community organization as their working hours are fixed and predictable. High involvement in local politics may increase the propensity to own.…”

“…Having a house has always been part of the Malaysian dream (Tan, 2008). In recent times, however, it has been a stretch for the average Malaysian to own a home.…”

Indicators in the Purchase of Housing Properties

“…Normally, people in the lowest income bracket are likely to opt for apartments (Opoku & Abdul-Muhmin 2010). Tan (2008) households as it indicates investors' capability to afford property and other assets. Higher income tends to influence the mobility of households as higher income clearly widens the likelihood of moving into larger and better houses (Tan, 2008).…”

“…Tan (2008) households as it indicates investors' capability to afford property and other assets. Higher income tends to influence the mobility of households as higher income clearly widens the likelihood of moving into larger and better houses (Tan, 2008). Shuid (2004) managed to express some concern on the low medium income in Kuala Lumpur's population with a percentage of 20.5%.…”

Sustainability or Bust: Malaysian Home Buyers’ Stated Preferences for Sus-Tainable Housing

“…While it would be interesting to see how demographics such as age and income affect home ownership, limited data prevents competition of this study against more through analyses such as in Tan [27].…”