The determinant factors affecting housing price in Malaysia

Owning a house becomes a necessary thing for citizens in Malaysia in order to complement and survival for their life and has a comfortable living with their loved one. Over the past few years, house price in Malaysia has experienced significant price extension and it became a worrying trend for borrowers. This study is an experiment to identify the macroeconomic determinant factors affecting housing prices in Malaysia from year 1987 until year 2016. There are total of three macroeconomics variables which are Gross Domestic Product (GDP), Population (P) and Interest rate (R) were taken into this study together with the dependent variable of Housing Price Index (HPI). The design of this study consists of 30 secondary data of each variable from year 1987 until year 2016 which are yearly basis. For data processing, the researcher is using EViews9.5 software to achieve all the data for analysis purposes. The result illustrates that just two out of three variables are significantly related to the movement of Housing Price Index (HPI) while the other one is insignificantly react. The overall result in this study intends to give additional understanding to the speculators, investors, buyers and policy makers in their decision making based on the unpredictable rise of house price in Malaysia.