Nonlinear relationship between housing supply and house price in Malaysia
The novelty of this paper is to ascertain a nonlinear relationship between housing supply and house price. This study is conducted based on panel dataset of four different types of houses in Malaysia from 2002Q3 through 2016Q4. Although housing supply has been theoretically assumed to be positively...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Vilnius Gediminas Technical University
2020-08-01
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| Series: | International Journal of Strategic Property Management |
| Subjects: | |
| Online Access: | https://journals.vgtu.lt/index.php/IJSPM/article/view/12343 |
| _version_ | 1818821632350748672 |
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| author | Geok Peng Yeap Hooi Hooi Lean |
| author_facet | Geok Peng Yeap Hooi Hooi Lean |
| author_sort | Geok Peng Yeap |
| collection | DOAJ |
| description | The novelty of this paper is to ascertain a nonlinear relationship between housing supply and house price. This study is conducted based on panel dataset of four different types of houses in Malaysia from 2002Q3 through 2016Q4. Although housing supply has been theoretically assumed to be positively and linearly related to house price, we observed that the number of new houses build in Malaysia has declined despite the increasing house prices. Hence, we posit that housing supply and house price are nonlinearly related. The results from pooled mean group estimation show the existence of inverted U-shaped housing supply curve. The threshold level of house price index is found at 186.92 where the effect of house price on housing starts will become negative after this point. We also find that the marginal effects of house price evaluated at the minimum and maximum levels are positive and negative, respectively, and statistically significant. This paper suggests that the squared term of house price should be included in estimating housing supply in Malaysia. The evidence of inverted U-shaped housing supply curve in Malaysia shows that housing authorities have taken steps to overcome the challenges of oversupply by reducing the approvals for housing development projects.
First published online 23 July 2020 |
| first_indexed | 2024-12-18T23:11:16Z |
| format | Article |
| id | doaj.art-7abd8a19984d4a0faf1bcca7efe5b75d |
| institution | Directory Open Access Journal |
| issn | 1648-715X 1648-9179 |
| language | English |
| last_indexed | 2024-12-18T23:11:16Z |
| publishDate | 2020-08-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | International Journal of Strategic Property Management |
| spelling | doaj.art-7abd8a19984d4a0faf1bcca7efe5b75d2022-12-21T20:48:20ZengVilnius Gediminas Technical UniversityInternational Journal of Strategic Property Management1648-715X1648-91792020-08-0124510.3846/ijspm.2020.12343Nonlinear relationship between housing supply and house price in MalaysiaGeok Peng Yeap0Hooi Hooi Lean1Economics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 USM, Penang, MalaysiaEconomics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 USM, Penang, MalaysiaThe novelty of this paper is to ascertain a nonlinear relationship between housing supply and house price. This study is conducted based on panel dataset of four different types of houses in Malaysia from 2002Q3 through 2016Q4. Although housing supply has been theoretically assumed to be positively and linearly related to house price, we observed that the number of new houses build in Malaysia has declined despite the increasing house prices. Hence, we posit that housing supply and house price are nonlinearly related. The results from pooled mean group estimation show the existence of inverted U-shaped housing supply curve. The threshold level of house price index is found at 186.92 where the effect of house price on housing starts will become negative after this point. We also find that the marginal effects of house price evaluated at the minimum and maximum levels are positive and negative, respectively, and statistically significant. This paper suggests that the squared term of house price should be included in estimating housing supply in Malaysia. The evidence of inverted U-shaped housing supply curve in Malaysia shows that housing authorities have taken steps to overcome the challenges of oversupply by reducing the approvals for housing development projects. First published online 23 July 2020https://journals.vgtu.lt/index.php/IJSPM/article/view/12343housing supplyhouse pricepooled mean groupnonlinearMalaysia |
| spellingShingle | Geok Peng Yeap Hooi Hooi Lean Nonlinear relationship between housing supply and house price in Malaysia International Journal of Strategic Property Management housing supply house price pooled mean group nonlinear Malaysia |
| title | Nonlinear relationship between housing supply and house price in Malaysia |
| title_full | Nonlinear relationship between housing supply and house price in Malaysia |
| title_fullStr | Nonlinear relationship between housing supply and house price in Malaysia |
| title_full_unstemmed | Nonlinear relationship between housing supply and house price in Malaysia |
| title_short | Nonlinear relationship between housing supply and house price in Malaysia |
| title_sort | nonlinear relationship between housing supply and house price in malaysia |
| topic | housing supply house price pooled mean group nonlinear Malaysia |
| url | https://journals.vgtu.lt/index.php/IJSPM/article/view/12343 |
| work_keys_str_mv | AT geokpengyeap nonlinearrelationshipbetweenhousingsupplyandhousepriceinmalaysia AT hooihooilean nonlinearrelationshipbetweenhousingsupplyandhousepriceinmalaysia |