The major factors driving movements of house price in Malaysia / Noor Riantie Ratimin

As with most economies, the housing market in Malaysia is an important component of the domestic economy. Residential market in Malaysia has experienced significant price expansion over the last few decades, at several states, expanded at higher rates. As the expertise believe that housing bubble exists because of the many factors including macroeconomics variable. As this study seeks to examine what are the main drives of the movement housing price index. This article intends to analyze the relationships between house price movements with regards of the interest rates, inflation rates, Gross Domestic Product (GDP), population rates and unemployment rates. Since one of the important sectors in Malaysia is property market, it is significant to identify the tone of the housing market and the factors affect its movement. There are total of five economic variables such as interest rates which measured by base lending rate ( B L R ) , Gross Domestic Product (GDP), inflation, unemployment rate and population rate were taken into study with the house price index. The design of this study comprises of information from secondary data of each variables from year 1980 until 2012 which in annually basis. In the process of findings, there are few types of analysis were tested by using Stata SE 10 and Eviews software, there are Correlation coefficient, multiple regression analysis and multicollinearity statistics. The overall study anticipates in contributing and enhancing both investors and government execution on scenario planning that have relationship upon the irregular rise of house price. In addition, this research tends to help the home purchasers to assess the right timing from macroeconomic factor to purchase their house.