Supply elasticity of new housing supply in Malaysia: an analysis across housing sub-markets

Geok Peng Yeap () and Hooi Hooi Lean ()
Additional contact information
Geok Peng Yeap: School of Social Sciences, Universiti Sains Malaysia

Economics Bulletin, 2020, vol. 40, issue 1, 807-820

Abstract: This study estimates the price elasticity of new housing supply in Malaysia. It models the new housing supply for different types of houses namely, detached, high-rise, semi-detached and terraced houses. This study employs structural approach that relates housing start to house price, construction cost and interest rate. The price elasticity of new housing supply is estimated directly from the coefficient of house price. The model is estimated based on autoregressive distributed lagged (ARDL) approach by using quarterly data covers the sample period from 2002 to 2015. The results show that housing start is positively related to house price. An increase in house price pushes the quantity supplied of new houses but the magnitude is less than unity showing that new housing supply is price inelastic in Malaysia during the period. Among the four types of houses, the supply of high-rise houses has the highest elasticity while the supply of detached houses has the lowest elasticity.

Keywords: housing supply; elasticity; house prices; new construction; Malaysia (search for similar items in EconPapers)
JEL-codes: C8 R2 (search for similar items in EconPapers)
Date: 2020-03-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I1-P68.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-19-00934

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().