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Inter-relationship between the housing market and housing finance system: evidence from Malaysia

    Rosli Said Affiliation
    ; Alaistair Adair Affiliation
    ; Stanley McGreal Affiliation
    ; Rohayu Majid Affiliation

Abstract

The Malaysian housing market and associated housing finance system have expanded significantly as a result of rapid urbanisation since the late 1980s. The key aspect of this paper is to analyse the inter-relationship between the housing market and housing finance system in Malaysia. The paper employs Vector Autoregressive approach and Granger Causality test to empirically investigate this inter-relationship. In Malaysia, no housing studies has actually looked into or used this approach to identify the inter-relationship between these two elements. The key findings show that there is a strong inter-relationship between the housing market and housing finance system. The direction of causality shows that there is a bi-directional relationship between the housing market and housing finance system. These inter-relationships provide evidence that sound performance of the sub-markets within the housing finance system is a determinant prerequisite of the robustness of the housing finance system, if a healthy performance of the housing market is to be achieved.

Keyword : Housing market, Housing finance, Mortgage-backed, Vector autoregressive, Causality

How to Cite
Said, R., Adair, A., McGreal, S., & Majid, R. (2014). Inter-relationship between the housing market and housing finance system: evidence from Malaysia. International Journal of Strategic Property Management, 18(2), 138-150. https://doi.org/10.3846/1648715X.2014.912691
Published in Issue
Jun 20, 2014
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