EVALUATION OF HOUSING MARKET AND ITS ASSOCIATED HOUSING FINANCE SYSTEMS IN EMERGING MARKETS: WITH REFERENCE TO SOUTH EAST ASIA

Rosli Said, Rohayu Ab Majid, Md Nasir Daud and Widiyanti

AfRES from African Real Estate Society (AfRES)

Abstract: Housing market and its associated housing finance systems continue to remain opportune to explore in South-east Asia. These include the expanse of different sub-markets within the systems, each with its own peculiarities. An approach has been taken to concentrate on the housing market on account of its importance as a tool toward social gratification as well as of investment. A key aspect of this original paper is to analyse the inter-relationship between the housing market and housing finance system in countries with emerging economies. Malaysia and Indonesia have been chosen as representative of the middle nation of South-east Asia, bridging the divide between the more advanced and less developed countries within the group. The paper employs cointegration analysis including causality and vector error correction models (VECM) to investigate this relationship. The key findings show that the housing markets in both countries are cointegrated, and market disequilibrium is corrected each year by changes in house prices of each country as a result of a combination of changes within the housing finance systems. The analysis was conducted over the period of 2002 – 2012 due to the unavailability of longer series in Indonesia which become the main constraint of the study.

Keywords: Cointegration; Emerging Markets; housing; Indonesia; Malaysia; VECM (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2014-09-01
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