Real interest rate and house prices in Malaysia: An empirical study

Tang, Tuck Cheong and Tan, Pei Pei (2015) Real interest rate and house prices in Malaysia: An empirical study. Economics Bulletin, 35 (1). pp. 270-275. ISSN 1545-2921

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Official URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB...

Abstract

This study examines the relationship between real interest rate and real house prices in Malaysia. The analysis covers recent quarterly data from 2001 to 2013. The regression results show a negative effect of real interest rate on the Kuala Lumpur house prices, but it is not the case for the remaining five reported states in Peninsular Malaysia. The Granger-causality tests also provide positive findings. The direction of causation is from real interest rate to real MHPI (the Malaysian House Price Indexes). This study supports the ripple effect - the states' house prices are intercaused, except for Pulau Pinang. These findings are relevant for policy implications.

Item Type: Article
Uncontrolled Keywords: Real interest rate; House prices; Malaysia
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Economics & Administration
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 05 Oct 2018 02:20
Last Modified: 05 Oct 2018 02:20
URI: http://eprints.um.edu.my/id/eprint/19592

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