Determinants of homeownership in Malaysia

Tan, Teck Hong (2008): Determinants of homeownership in Malaysia. Published in: Habitat International , Vol. Vol. 3, No. 3 (16 June 2008): pp. 318-335.

Abstract

The housing industry is crucial to the sustainable development in Malaysia. The efficiency and effectiveness of the housing delivery system requires housing provision for all. The housing industry, which had grown rapidly in the 1980s encountered property oversupply recently. The majority of these units remain unsold for reasons beyond price factor, ranging from poor location to unattractive houses. The main objective of this paper is to tackle property oversupply in the country by examining a detailed knowledge of home owning determinants. Homeownership should be encouraged as positive externalities of homeownership can be found in many housing surveys. Homeownership is a complex issue that is the result of many determinants, including housing characteristics (house types and property types), employment and income trends, socio-cultural and demographic descriptors. In addition to determinants, efforts needed to reduce regulatory barriers in the housing delivery system that can significantly increase the cost of producing houses. The government should make home financing more available and affordable by providing subsidies to low income families and creating incentives to save for homeownership. Efforts also needed to extend opportunities to enhance the affordability of homeownership by liberalizing rules and regulation of Employee Provident Fund (EPF) withdrawal.

• Item Type: MPRA Paper
• Language: English
• Keywords: Homeownership, Homeownership Externalities, Malaysia
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand

References

Aaronson, D., A Note on the Benefits of Homeownership, Journal of Urban Economics. 47 (2000) 356 – 369.

Bourassa, S.C., A Model of Housing Tenure Choice in Australia, Journal of Urban Economics, 37 (1995) 161 – 175.

Coulson, N.E., Why Are Hispanic- and Asian-American Homeownership Rates So Low? Immigration and Other Factors, Journal of Urban Economics. 45 (1999) 209 – 227.

Department of Statistics Malaysia. Population and Housing Census of Malaysia., Kuala Lumpur, 2000.

DiPasquale, D., and Glaeser., E.L, Incentives and Social Capital: Are Homeowners Better Citizens? Journal of Urban Economics. 45 (1999) 354 – 384.

Fama, E.F., and Schwert, G. W., Asset Returns and Inflation, Journal of Financial Economics. 5 (1997) 115 – 164

Fisher, L.M., and Jaffe, A.J., Determinants of International Home Ownership Rates, Housing Finance International. 18, 1 (2003) 34 – 42.

Green, R K., and White, M, J., Measuring the Benefits of Homeowning: Effects on Children, Journal of Urban Economics. 41 (1997) 441 – 461.

Glaeser, Edward L., and Sacerdote, B., The Social Consequences of Housing, Journal of Housing Economics. 9 (2000) 1 – 23.

Goodman, A.C., Demographics of Individual Housing Demand, Regional Science and Urban Economics. 20 (1990) 83 – 102.

Gwin, C.R., and Ong, S.E., Do We Really Understand Homeownership Rates? An International Study, Working Paper Series, Baylor University.

Hair, J.H., Anderson, R.E., Tatham, R.L., and Black, W.C., Multivariate Data Analysis, fifth edition. Prentice Hall International. New Jersey, 1998.

Haurin, D. R., and Kamara D., The Homeownership Decision of Female-Headed Households, Journal of Housing Economics. 2, 4 (1993) 293 – 309.

Haurin, D. R., Parcel, T. L., and Haurin, R. J., Does Homeownership Affect Child Outcomes? Real Estate Economics. 30, 4 (2002) 635 – 666

Hutchison, N.E., Housing as an Investment? A Comparison of Returns from Housing with Other Types of Investment, Journal of Property Finance, 5, 2 (1994) 47 – 61.

Laakso, S., and Loikkanen, H.A., (1995). “Finnish Homes – Through Passages or Traps?” Real Estate Economics. 23, 4: 475 – 495.

Maki, A., Liquidity Constraints: A Cross-Sectional Analysis of the Housing Purchasing Behavior of Japanese Households, The Review of Economics and Statistics. 75, 3 (1993) 429 – 437.

Rohe, W.M., and Stewart L.S., Homeownership and Neighborhood Stability, Housing Policy Debate. 7, 1 (1996) 37 – 81

Rossi, P.H., and Weber, E., The Social Benefits of Homeownership: Empirical Evidence from National Survey, Housing Policy Debates. 7 (1996) 1 – 35.

Vroom, Victor. H., Work and Motivations. John Wiley and Sons. New York, 1964.