Excessive speculation and its regulation on house prices: A Malaysia experience

Mohd Razif, N.F. and Samsul Kamal, N.S. and Mohamad, S. and Hashim, M.A. (2017) Excessive speculation and its regulation on house prices: A Malaysia experience. In: 15th International Conference on Social Sciences, Business, Technology and Management (SBTM-DEC-2017), 2-3 December 2017, Ibis Style Myeongyong-dong Hotel, Seoul, South Korea.

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Abstract

Speculation is ordinarily understood as a mean to purchase a good for a later resale, rather than for use. In other words, speculation is an act of selling a good, temporarily, with the intention of gaining profit from later re-purchase due to the price changes. Speculators play a very important role in the marketplace in term of adding liquidity and stabilizing the price fluctuation. However, speculators who partake in excessive speculation can resulted to destabilizing effect on the financial system. Excessive speculation that leads to zero-sum outcomes are prohibited in Islamic perspectives on finance and also condemned in conventional finance. Other than trades in derivatives, commodities, bonds, equities or currencies, speculator is also looking forward to make profit in potential real estate namely in residential housing market rather than commercial, industrial or agricultural. It is undeniable that speculation has its particular macroeconomic importance as it’s contributes in smoothening a stagnant property market. However, speculation also creates an artificial market price trends that leads to the benchmarking of housing price. In fact, although housing is a key driver of business cycle but excessive speculation in property market were also the causes of financial crisis in 2008. Therefore, this article explores on how Government of Malaysia initiates to curb the excessive speculation by introducing a better policy of banking credit system/mortgage/housing loan, housing tax and provision of affordable housing for low and middle income class in particular.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Conference paper
Uncontrolled Keywords: Excessive speculation; Property; Islamic finance; Housing Price
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc
H Social Sciences > HG Finance
Divisions: Academy of Islamic Studies > Dept of Fiqh & Usul
Depositing User: Mr. Mohd Safri
Date Deposited: 20 Apr 2018 07:18
Last Modified: 20 Apr 2018 07:18
URI: http://eprints.um.edu.my/id/eprint/18512

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