Macroeconomic Determinants of House Prices in Malaysia

Pinjaman, Saizal; Kogid, Mori

doi:10.17576/jem-2020-5401-11

Cited by 10 publications

(8 citation statements)

References 16 publications

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“…Higher unemployment rates are associated with lower real estate prices. In addition, other studies conducted by Pinjaman & Kogid (2020) and Hikam (2021) show that exchange rates have an effect or influence on house prices. Research Hikam (2021), shows that the variable Power Purchasing Parity or purchasing power has a positive effect on house prices in 5 Asian countries.…”

Section: Literature Reviewmentioning

confidence: 88%

Analysis of House Price Determination in 13 G20 Countries: Random Effect Model

Abasimi

Aulia

Khasanah

2023

JAMPE

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A house or a place to live is a primary need for all beings, but the lack of affordable housing to buy or rent can trigger a global housing crisis. After the collapse of the housing market in the US or the subprime crisis of 2008-2009 there was a revival of focus on the housing market. Empirical research has been conducted to look at the variables that affect house prices. However, it is still rare for researchers to examine the influence of macroeconomic variables in countries that have a strong role in the world economy. Therefore this study aims to determine the effect of the Consumer Price Index, Construction GDP, Unemployment Rate, Population Density, Exchange Rate and Power Purchasing Parity on the House Price Index as an indicator that reflects house prices. So, the contribution of this research is to provide novelty in the use of the house price index to determine the determinants that influence it. This research is a quantitative research using secondary data. The regression model used in this study is the Random Effects Model. The result of this study is the Consumer Price Index and Purchasing Power Parity have a significant positive impact on house prices. Therefore, the government needs to maintain the stability of these two indicators so that house prices remain stable. The Unemployment Rate and Exchange Rate show a significant negative effect on house prices. Therefore, the government needs to monitor and maintain the stability of the exchange rate and reduce the unemployment rate so that there is no significant decline in house prices. Meanwhile, construction GDP and population density show no effect on house prices. Additional studies are urgently needed to identify factors and housing price movements contributing to global and regional levels.

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Section: Literature Reviewmentioning

confidence: 88%

Analysis of House Price Determination in 13 G20 Countries: Random Effect Model

Abasimi

Aulia

Khasanah

2023

JAMPE

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“…For instance, Luo and Yao (2021) argue that structural attributes like availability of higher education institutes nearby and closeness to the public transportation services significantly affect housing prices. The more is the increase in the interest rate, inflation and housing supply, the less would be the housing prices, whereas the increase in GDP and local currency appreciation is positively affecting housing prices (Pinjaman and Kogid, 2020). Institutional, structural and policy factors like more excessive tax relief, below-average long-run supply and stringent rent control also determine the housing prices (Geng, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Factors determining housing prices: empirical evidence from a developing country’s Pakistan

Khan

Ali

Khan

et al. 2022

IJHMA

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Purpose This study aims to explore empirically the impact of various factors/determinants on housing prices at the country level as well as in Lahore, the most populous metropolitan city of the most populous province Punjab, Pakistan. Design/methodology/approach This study uses monthly data ranging from 2013M1 to 2020M1 on variables used in the study. Based on the stationarity results, the method of robust least square is used as an estimation technique. The validity of initial results is also authenticated by canonical cointegration regression. Findings The empirical result reveals that all included variables significantly affect housing prices both at country level as well as in Lahore. This study found negative impact of regressor age, real exchange rate and urbanization on housing prices, whereas the positive impact of gross domestic product (GDP) per capita, foreign remittances, broad money and real interest rate on housing prices in the case of Pakistan was found. On the other hand, results unveiled the negative impact of regressor age (proportion of population aged between 15 and 64), real exchange rate and urbanization on housing prices, whereas the positive impact of GDP per capita, foreign remittances, broad money and real interest rate on housing prices in Lahore metropolitan city was unveiled. Originality/value Based on the extant literature survey, this is a more holistic study of its kind that uncovers the macroeconomic determinants by considering the demand side, supply side and demographic factors of escalated housing prices in Pakistan, so that proper policies can be adopted to keep the housing sector stable. Empirical findings are helpful to acquire an enhanced understanding of how the housing price is determined and form a base for government to tackle the housing affordability problem.

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“…According to the house price index, the housing market has a strong positive link with economic growth (Lizam et al, 2014). The long-term movement of housing prices is also influenced by macroeconomic factors (Pinjaman and Kogid, 2020). Malaysians used to call the average house price in Malaysia the Malaysian House Price Index (MHPI), published quarterly by the National Property Information Centre and set up by the Department of Valuation and Index Year Property Services (VPSD).…”

Section: Literature Reviewmentioning

confidence: 99%

Macroeconomic Variables and Malaysia House Price Index

Zulkifli¹,

Kogid²,

Pinjaman³

et al. 2022

IJAREMS

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Malaysia is one of the developing countries facing an upward trend in demand for housing. However, the increasing trend in housing prices has become worrying. This study aims to examine the macroeconomic determinants of the housing price in Malaysia. The house price index and macroeconomic data on gross domestic product growth, consumer price index, and money supply were collected quarterly over the period from 2000 to 2019. The Autoregressive Distributed Lag (ARDL) model was used to investigate the effects of long-run and short-run estimates of the proposed econometric model based on the selected macroeconomic variables mentioned above. The results from the Augmented Dickey-Fuller and Phillips-Perron tests of stationarity indicated that all the variables were non-stationary at the level, I(0) but stationary at the first difference, I(1). The long-run coefficient estimates showed that the gross domestic product and money supply are significant and positively influenced the house price index in Malaysia. In addition, the consumer price index was also significant but had a negative relationship with the house price index in the long run. Further analysis using causality tests revealed that statistically, only gross domestic product and money supply were found significant in influencing the house price index in the short run.

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Macroeconomic Determinants of House Prices in Malaysia

Cited by 10 publications

References 16 publications

Analysis of House Price Determination in 13 G20 Countries: Random Effect Model

Analysis of House Price Determination in 13 G20 Countries: Random Effect Model

Factors determining housing prices: empirical evidence from a developing country’s Pakistan

Macroeconomic Variables and Malaysia House Price Index

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