The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia

House prices in Malaysia have recorded higher levels every year. Many scholars argue that there might be housing bubble in Malaysia. This study investigates the housing prices in Malaysia. In particular, the objective of this study is to explore the effect of interest rates and government developmen...

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Main Author:	Khang-Qing, Clement Chen
Format:	Thesis
Language:	eng eng eng
Published:	2019
Subjects:	HC Economic History and Conditions
Online Access:	https://etd.uum.edu.my/8566/1/s821831_01.pdf https://etd.uum.edu.my/8566/2/s821831_02.pdf https://etd.uum.edu.my/8566/3/s821831_references.docx
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id	my-uum-etd.8566
record_format	uketd_dc
spelling	my-uum-etd.85662022-08-08T06:47:03Z The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia 2019 Khang-Qing, Clement Chen Hassan, Sallahuddin School of Economics, Finance & Banking School of Economics, Finance & Banking HC Economic History and Conditions House prices in Malaysia have recorded higher levels every year. Many scholars argue that there might be housing bubble in Malaysia. This study investigates the housing prices in Malaysia. In particular, the objective of this study is to explore the effect of interest rates and government development expenditure on house price in Malaysia in the long run; to examine the effect of interest rates and government development expenditure on house price in Malaysia in the short run; and to identify the existence of bubble in Malaysian housing market. The methodologies used in this study are Vector Error Correction Model (VECM) and Price Stability Model (PSM) to investigate house price in Malaysian over the past 34 years from 1985 to 2018. The variables in empirical analysis used house price, interest rates, and government development expenditure are house price index, base lending rates, and government spending in developing the infrastructure and facilities. The findings show that development expenditure has a significant positive relationship with Malaysian house price. However, interest rates show a positive result due to some of the reasons such as houses are a necessity for the people and the influences of other variables are more significant in the housing market. The finding also shows that the short run Malaysian house price converges to its equilibrium in the long run. The result of PSM analysis shows that housing bubble have significantly existed in Malaysian housing market. The policies proposed to address the issue of house prices and housing bubbles include establishing suitable asset-liability management and liquidity management, adopting suitable measurement in credit screening process and monitoring housing market to prevent housing bubbles. The implication of these policies keep investment activities away from speculation as well as preventing low credit borrowers from getting high loans to avoid risks. 2019 Thesis https://etd.uum.edu.my/8566/ https://etd.uum.edu.my/8566/1/s821831_01.pdf text eng public https://etd.uum.edu.my/8566/2/s821831_02.pdf text eng public https://etd.uum.edu.my/8566/3/s821831_references.docx text eng public other masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Hassan, Sallahuddin
topic	HC Economic History and Conditions
spellingShingle	HC Economic History and Conditions Khang-Qing, Clement Chen The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
description	House prices in Malaysia have recorded higher levels every year. Many scholars argue that there might be housing bubble in Malaysia. This study investigates the housing prices in Malaysia. In particular, the objective of this study is to explore the effect of interest rates and government development expenditure on house price in Malaysia in the long run; to examine the effect of interest rates and government development expenditure on house price in Malaysia in the short run; and to identify the existence of bubble in Malaysian housing market. The methodologies used in this study are Vector Error Correction Model (VECM) and Price Stability Model (PSM) to investigate house price in Malaysian over the past 34 years from 1985 to 2018. The variables in empirical analysis used house price, interest rates, and government development expenditure are house price index, base lending rates, and government spending in developing the infrastructure and facilities. The findings show that development expenditure has a significant positive relationship with Malaysian house price. However, interest rates show a positive result due to some of the reasons such as houses are a necessity for the people and the influences of other variables are more significant in the housing market. The finding also shows that the short run Malaysian house price converges to its equilibrium in the long run. The result of PSM analysis shows that housing bubble have significantly existed in Malaysian housing market. The policies proposed to address the issue of house prices and housing bubbles include establishing suitable asset-liability management and liquidity management, adopting suitable measurement in credit screening process and monitoring housing market to prevent housing bubbles. The implication of these policies keep investment activities away from speculation as well as preventing low credit borrowers from getting high loans to avoid risks.
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Khang-Qing, Clement Chen
author_facet	Khang-Qing, Clement Chen
author_sort	Khang-Qing, Clement Chen
title	The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
title_short	The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
title_full	The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
title_fullStr	The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
title_full_unstemmed	The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia
title_sort	influence of interest rate and government development expenditure on house price and identification of housing bubble in malaysia
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2019
url	https://etd.uum.edu.my/8566/1/s821831_01.pdf https://etd.uum.edu.my/8566/2/s821831_02.pdf https://etd.uum.edu.my/8566/3/s821831_references.docx
_version_	1747828414867308544

The influence of interest rate and government development expenditure on house price and identification of housing bubble in Malaysia

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