Munich Personal RePEc Archive

Causality of Residential Properties Price Movements in Malaysia

Abdul Aziz, Ahmad Faizal (2011): Causality of Residential Properties Price Movements in Malaysia.

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Abstract

Many studies had been previously conducted to analyse factors that affects price of residential properties but none of these research addresses the issue specifically to Malaysia. This paper serves the purpose to fill in the gap whereby factors which were empirically proven to affect price of residential properties are tested with Malaysian data, covering the period from 1990 to 2009. Data used in this study were collected from Government’s official sources, i.e. as published by the Central Bank of Malaysia (Bank Negara Malaysia), Department of Statistics Malaysia and National Property Information Centre (NAPIC) of the Valuation and Property Services Department of Malaysia. The time series techniques namely cointegration, vector error correction model and variance decomposition were used to estimate the significance of identified variables to the price of residential properties. It is important for policymakers especially the Federal Government to know the variables that significantly influenced the price of residential properties as to control the price so as to preserve the wealth effect and to balance racial composition in an area.

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