Determinants of house price index in Malaysia: An islamic economic perspective
Capita, Overnight Polic The Islamic economic perspective relates to house is described as daruriyyat (essential). In Maqasid Al Shari’ah, solving issues surrounding unaffordability in owning houses is part of masalahah of ummah since the necessity for houses falls under an essential or daruriyyat. T...
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| Format: | Thesis |
| Language: | eng eng eng |
| Published: |
2019
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| Subjects: | |
| Online Access: | https://etd.uum.edu.my/10048/1/s822533_01.pdf https://etd.uum.edu.my/10048/2/s822533_02.pdf https://etd.uum.edu.my/10048/3/s822533_references.docx |
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| Summary: | Capita, Overnight Polic The Islamic economic perspective relates to house is described as daruriyyat (essential). In Maqasid Al Shari’ah, solving issues surrounding unaffordability in owning houses is part of masalahah of ummah since the necessity for houses falls under an essential or daruriyyat. This study aims to identify the factors that determine house price index in Malaysia. Selected macroeconomic variables (i.e. the economic performance, household income, interest rates and government policies) were tested. Data were gathered from 2010 to 2018 on quarterly basis. The time series analysis was carried out using Vector Error Correction Model (VECM) and Forecast Variance Error Decomposition (FVED) to see the long-run and short-run dynamics among the selected macro-economic variables. Finding shows that all variables are co-integrated in long run however, the government policies were less likely to affects house price in short run. The strongest factor is interest rate, followed by economic performance and income. Thus, in short run government policies were less effective in determining house price while for long run all these variables are important. Knowing that the interest rate and economic condition play important roles in determining house price, government should play their roles in sustaining the Malaysian economic performance at the same time ensuring affordable house are meeting the demand of Malaysian that are in needs. Besides, the financing institution particularly Islamic institution is suggested to actively participate as to look as this matter for masalahah of ummah since financing rate (conventional: interest rate) is an important determinants of house price.
The time series analysis technique such as Both models are used in this study to unravel This study provides evidence that selected macro-economic variables are having significant long-run and short-run effects on the house price index. The finding shows that all variables are co-integrated in the long run however, the government policies were less likely to affects house price in the short run. The strongest factor is the interest rates, followed by economic performance and household income. Thus, in short-run government policies were less effective in determining house pricemwhile for a long run all these variables are important and very significant. Knowing that the interestmrates and economic condition are playing important roles in determining house price, themgovernment should play their roles in sustaining the economy of one country besides their function as policymakers, especially the Bank Negara Malaysia is ensuring affordable house is meeting the demand of Malaysian that are in needs. However, it does not assess the micro-economic variables and behavior of housing industry in Malaysia. Future research can include participation from public opinion through a well-structured questionnaire on the household population towards house,prices in Malaysia. In Malaysia itself, house price changes might be connected with economic condition either recession or inflation over period of time. Due to this situation, various solutions were introduced to help Malaysia’s housing systems sustained. This paper presents the study on Malaysia House iii Price Index against macro-economic variables including economic performance, household income, interest rates and government policies. The purpose is to measure each selected variable are either inter-related, correlated and having relationship in short-term and long run. The data are gathered and time series analysisy Rate, Business Confidence Index. |
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