Determinants of housing prices: evidence from East Coast Malaysia

Siti Hafsah Zulkarnain, Abdol Samad Nawi, Miguel Angel Esquivias and Anuar Husin

International Journal of Housing Markets and Analysis, 2024, vol. 18, issue 3, 573-597

Abstract: Purpose - The purpose of this study is designed to achieve the learning process in producing studies involving economic issues and scenarios in business management in Malaysia. In addition, this study will provide exposure to the integration of managerial skills by using both microeconomics and macroeconomics concepts and theories to aid decision-making in a business environment. Design/methodology/approach - The research method comprised qualitative methodology of literature review, case study and quantitative methodology of multiple linear regression (MLR). In this case, seven microeconomics and macroeconomics factors which are believed to significantly affect house price index (HPI) are taken into consideration which includes gross domestic product, consumer price index (CPI), government tax and subsidy on housing, overnight policy rate, unemployment rate (UNEMP), the median income (INC) and cost of production index. Findings - This research has resulted in three significant factors affecting HPI from MLR, which include CPI, UNEMP and INC where the increase of these factors will cause a high increment of HPI. The other four factors are not significant. Originality/value - Malaysia has been facing the stagnancy in house market these recent years due to issues such as massive oversupply, impacting Malaysia’s economy specifically focusing on domestic direct investment. To avoid oversupply issues, the vitality of future house demand and pricing forecast should be comprehended by involved bodies for more effective planning for the house development industry. To make a better and bigger impact, this research is intended to analyse the microeconomic and macroeconomic factors affecting the HPI to better understand the significance of each of these factors to the changes of HPI to resolve these economic issues.

Keywords: Consumer price index; Cost of production index; Gross domestic product; Housing price index; Overnight policy rate; Unemployment rate (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-10-2023-0139

DOI: 10.1108/IJHMA-10-2023-0139

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