Housing price in Malaysia: the impact of macroeconomic indicators

The objective of this study is to investigate the impact of macroeconomic variables on the housing price in Malaysia. This study uses time-series data for four variables which is collected on quarterly basis that covering 14-year period from year 2005 until 2019. The data was collected and computed based on their historical accounting from Malaysia Department Statistic and Valuation and Property Services Department. The findings showed that in the long run relationship, when cointegration test has been applied, the independent variables (interest rates, inflation rates and gross domestic product) are significant with housing price. The result also showed that all variables were influenced to the fluctuations and the growth of house prices in Malaysia. Through the equation derived, the interest rate and inflation rate have negative relationship with house price while gross domestic product show positive relationship with housing price. This indicates that all economic indicators are important factors, which will influence the changing and performance of the housing prices in future. In order to get a better result, further researcher is advising to take longer period of time in carrying out the study because it may influence accuracy of the result of the study. Moreover, more research regarding housing price is needed in order to oversee the changing of house price year by year based on different independent variables. This study provides clear implications related to the theory and contributes to the literature in the housing industry. The study also provides invaluable insightfulness to various stakeholders including policy makers, institutional support and small contractors about the increasing on demand of house and fluctuation of price has that can lead to the changes in the condition of housing market