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Examining the Impact of Macroeconomic Factors on Housing Prices in Malaysia

Author

Listed:
  • Fifi Syafika Othman

    (Faculty of Business and Management, Universiti Teknologi MARA, Pasir Gudang Branch, 81750 Masai, Johor, Malaysia)

  • Suhana Mohamed

    (Faculty of Business and Management, Universiti Teknologi MARA, Pasir Gudang Branch, 81750 Masai, Johor, Malaysia)

  • Fatin Farazh Ya’acob

    (Faculty of Business and Management, Universiti Teknologi MARA, Segamat Branch, 85000 Segamat, Johor, Malaysia)

Abstract

This research investigates the influence of macroeconomic variables on property prices in Malaysia, specifically analyzing the correlations among gross domestic product (GDP), interest rates, and inflation from 1988 to 2022. Economic upheavals, including the COVID-19 epidemic, have exacerbated the Malaysian housing market’s difficulties, which play a crucial role in the country’s economy. This study uses econometric models to examine the impact of macroeconomic factors on the Housing Price Index (HPI), including both short-term and long-term effects. Its goal is to fill gaps in the current literature. The results demonstrate a notable association between the rise of the Gross Domestic Product (GDP), interest rates, and housing prices, emphasizing the need for policymakers to monitor these interconnections regularly. Moreover, the research underlines the need for focused governmental interventions to enhance housing affordability and stability of the market, especially in metropolitan regions undergoing rapid expansion. This study offers valuable insights into regional variations in housing market reactions to macroeconomic shifts by combining case studies from different areas in Malaysia. This research ultimately enhances our knowledge of the Malaysian housing market. It provides valuable advice for stakeholders who need to navigate the fluctuations in home prices in a dynamic economic landscape.

Suggested Citation

  • Fifi Syafika Othman & Suhana Mohamed & Fatin Farazh Ya’acob, 2024. "Examining the Impact of Macroeconomic Factors on Housing Prices in Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(11), pages 592-603, November.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:11:p:592-603
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    References listed on IDEAS

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