Assessing the economic indicators that influence the residential property price in Kuala Lumpur

Over the years, the increase in residential property prices has become a concern for nations worldwide. Malaysia is no exception, with residential property prices surpassing homeowners' income levels, resulting in an unaffordability issue. The issue is more concerning in urban areas, such as Kuala Lumpur, where residential prices are rising higher than other states in the country. Although the issue of residential prices is prevalent in the country, a few studies have been conducted on the dynamic of economic indicators and their influence on residential property prices in urban areas over the years. This study aims, therefore, attempts to investigate the causal relationship of the economic indicators influencing residential property prices in Kuala Lumpur. Using the empirical study as a research methodology, the data was collected from a literature review of previous studies, and statistical data was assessed from Bank Negara Malaysia (BNM), the Department of Statistics Malaysia (DOSM), and the National Property Information Centre (NAPIC). The Pearson Correlation in SPSS was used to assess in-depth statistical analysis. The findings revealed that economic indicators like inflation and gross domestic product (GDP) have a positive relationship with residential property prices. On the other hand, unemployment indicators show a negative correlation, while GDP and inflation demonstrate weaker correlations. This study contributes to a better insight into the overall performance of economic indicators, which is crucial for predicting future trends in real estate. The study additionally serves as the groundwork for policymakers and key real estate players to make informed decisions regarding policy considerations and real estate market strategies.