Housing bubble phenomena and their determinants in Kuala Lumpur

Housing bubble phenomena and their determinants in Kuala Lumpur

Housing could be perceived as both a principal of residence and an investment asset. In the past 15 years, this asset class witnessed a dramatic increase in prices, especially in the Kuala Lumpur. The rampant increase in house prices has widening the gap between a house's expected value and i...

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Main Author: Aqmar, Hamid
Format: Thesis
Language:eng
eng
Published: 2014
Subjects:
HG Finance
Online Access:https://etd.uum.edu.my/4700/1/s815937.pdf
https://etd.uum.edu.my/4700/2/s815937_abstract.pdf
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id my-uum-etd.4700
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Wong, Woei Chyuan
topic HG Finance
spellingShingle HG Finance
Aqmar, Hamid
Housing bubble phenomena and their determinants in Kuala Lumpur
description Housing could be perceived as both a principal of residence and an investment asset. In the past 15 years, this asset class witnessed a dramatic increase in prices, especially in the Kuala Lumpur. The rampant increase in house prices has widening the gap between a house's expected value and its fundamental price. A wide deviation of house price from its fundamental price could cause a housing bubble, which would have a negative impact on the financial market. This paper examines the potential emergence of a housing bubble by using rent to price ratio and employing economic fundamental factors to estimate housing fundamental value, and take difference between actual house price and fundamental value as bubble. Based on the time series regression of the economic fundamental factors, shows that properties in Kuala Lumpur were priced at 4.2% and 11.3% above their fundamental value in years 2012 and 2013 respectively. This finding also were supported by the simple test indicator of rent to price ratio where the ratio were declining drastically after 2011. With the divergence of market price and fundamental price shows an increasing gap each year proved that housing bubble are likely to appear
format Thesis
qualification_name masters
qualification_level Master's degree
author Aqmar, Hamid
author_facet Aqmar, Hamid
author_sort Aqmar, Hamid
title Housing bubble phenomena and their determinants in Kuala Lumpur
title_short Housing bubble phenomena and their determinants in Kuala Lumpur
title_full Housing bubble phenomena and their determinants in Kuala Lumpur
title_fullStr Housing bubble phenomena and their determinants in Kuala Lumpur
title_full_unstemmed Housing bubble phenomena and their determinants in Kuala Lumpur
title_sort housing bubble phenomena and their determinants in kuala lumpur
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2014
url https://etd.uum.edu.my/4700/1/s815937.pdf
https://etd.uum.edu.my/4700/2/s815937_abstract.pdf
_version_ 1747827783718928384
spelling my-uum-etd.47002022-04-10T00:15:27Z Housing bubble phenomena and their determinants in Kuala Lumpur 2014 Aqmar, Hamid Wong, Woei Chyuan Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance Housing could be perceived as both a principal of residence and an investment asset. In the past 15 years, this asset class witnessed a dramatic increase in prices, especially in the Kuala Lumpur. The rampant increase in house prices has widening the gap between a house's expected value and its fundamental price. A wide deviation of house price from its fundamental price could cause a housing bubble, which would have a negative impact on the financial market. This paper examines the potential emergence of a housing bubble by using rent to price ratio and employing economic fundamental factors to estimate housing fundamental value, and take difference between actual house price and fundamental value as bubble. Based on the time series regression of the economic fundamental factors, shows that properties in Kuala Lumpur were priced at 4.2% and 11.3% above their fundamental value in years 2012 and 2013 respectively. This finding also were supported by the simple test indicator of rent to price ratio where the ratio were declining drastically after 2011. With the divergence of market price and fundamental price shows an increasing gap each year proved that housing bubble are likely to appear 2014 Thesis https://etd.uum.edu.my/4700/ https://etd.uum.edu.my/4700/1/s815937.pdf text eng public https://etd.uum.edu.my/4700/2/s815937_abstract.pdf text eng public masters masters Universiti Utara Malaysia Blanchard, O., & Watson, M. (1 982). Bubbles, rational expectations, and financial markets. In Crises in the economic and financial structure (pp. 295-315). New York. Caballero, R. J., & Krishnamurthy, A. (2005). BUBBLES AND CAPITAL FLOW VOLATILITY: Journal of Monetary Economics, (53), 1-22. Chan, H. 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