Modelling an economic relationship for macroeconomic determinants of Malaysian housing prices / Marziah Mokhtar, Sabariah Yusoff and Muhammad Danial Samsuddin

Mokhtar, Marziah and Yusoff, Sabariah and Samsuddin, Muhammad Danial (2021) Modelling an economic relationship for macroeconomic determinants of Malaysian housing prices / Marziah Mokhtar, Sabariah Yusoff and Muhammad Danial Samsuddin. Advances in Business Research International Journal, 7 (1). pp. 242-251. ISSN 2462-1838

Abstract

The issue of housing affordability is increasingly becoming a phenomenon as property prices in Malaysia have
risen beyond the reach of most people. Hence, the objective of the study is to investigate key macroeconomics
determinants that trigger the upward movement of housing prices in Malaysia. The paper also seeks to establish
the best fit economic model, that represents the relationship between housing prices and its macroeconomics
determinants. Four economic models are proposed in depicting the economic relationship between house price
index, which acts as proxy for housing prices, and macroeconomic determinants namely gross domestic product
(GDP), interest rate (INT), inflation rate (INF) and exchange rate (ER). The Exponential Model is selected to be
the most fit model for the data of 30-year period covering 1989 till 2018. Diagnostic tests are conducted to
identify the existence of statistical problem of multicollinearity and autocorrelation, and hence steps are taken to
rectify them accordingly. The analytical results show that gross domestic product (GDP), interest rate (INT) and
exchange rate (ER) are all positively significant macroeconomic variables that explain the volatility of housing
prices in Malaysia. However, the inflation rate (INF), which negatively affect the housing prices is not a
significant variable.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Mokhtar, Marziah
marzi742@uitm.edu.my
Yusoff, Sabariah
sabariahy@uitm.edu.my
Samsuddin, Muhammad Danial
UNSPECIFIED
Subjects: H Social Sciences > HF Commerce > Business education
H Social Sciences > HF Commerce > Customer services. Customer relations
H Social Sciences > HF Commerce > Personnel management. Employment management
H Social Sciences > HF Commerce > Personnel management. Employment management > Performance technology
Divisions: Universiti Teknologi MARA, Shah Alam > Faculty of Business and Management
Journal or Publication Title: Advances in Business Research International Journal
UiTM Journal Collections: UiTM Journal > Advances in Business Research International Journal (ABRIJ)
ISSN: 2462-1838
Volume: 7
Number: 1
Page Range: pp. 242-251
Keywords: Housing prices, Gross domestic products, Inflation rate, Interest rate, Exchange rate
Date: May 2021
URI: https://ir.uitm.edu.my/id/eprint/49524
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