DETERMINANTS OF HOUSING PRICE IN MALAYSIA

Abstract

The purpose of this research is to study the determinants of housing prices in Malaysia by using annual time series data for the period of 30 years from 1991 to 2021. To get meaningful results, Dynamic Ordinary Least Squares (DOLS) method is used. Housing prices is selected as dependent variable and gross domestic product, interest rate and unemployment as independent variables. Other than that, it also aims to find if there is a long-run relationship between the independent and dependant variables. Based on the estimated results, it is revealed that some of the variables tested in this study do affect the housing prices significantly, while some are not. In details, the findings show that interest rate and unemployment do have short run relationship while GDP has no short run relationship with housing price. Moreover, it is also revealed that no long-run relationship exists between the independent variables and housing prices.