Munich Personal RePEc Archive

Is the relationship between housing price and banking debt symmetric or non-symmetric? evidence from Malaysia based on NARDL

Azwan, Nurul Iman and Masih, Mansur (2019): Is the relationship between housing price and banking debt symmetric or non-symmetric? evidence from Malaysia based on NARDL.

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Abstract

The increasing price of housing property in Malaysia has become a concern as it increases the cost of living through debt payment by households. The purpose of the paper is to investigate whether the housing price has an asymmetric relationship with banking debt. The asymmetric relationship will be tested using the NARDL method. The research will aid the policymakers in deciding whether measures to control housing loan or alternatively, the initiatives and controls on the housing supply-side is better to curb increasing price of houses. The paper finds that the relationship between banking debt and housing prices is asymmetric in the short run and symmetric in the long run. However, we find that the relationship between housing debt and housing prices is asymmetric in both the short and long run. A positive change in housing debt will affect the housing price inflation more than a negative change. Through the causality tests, we find that policies should focus on the supply-side and price control policies to affect the housing price, rather than the controls on banking debt

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