Determinants of Residential Property Price in Malaysia

The objective of this study is to examine the factors that affect house price in the Malaysian market. By using the quarterly observation from the year 1994 to the year 2022, the study reports the significant long-run relation between house prices and each of macroeconomic variable, that include inflation, GDP, interest rate and exchange rate. In the short-run, the previous quarter of each macroeconomic variable is detrimental to predict their contemporaneous house price, interest rate and exchange rate respectively. In the long-run relation, the study demonstrates the significance of long-run relation between inflation and exchange rate to the housing prices in the market. Nonetheless, GDP and interest rate were not significantly affect the house price, pertaining to development policies and government interventions in the property market.