Housing bubbles assessment 2005-2010

Experiences in Klang Valley, Malaysia

Mohd. Yusof Hussain, Rahana Abdul Rahman, Fairuz Nabilla Mohamed Husain, Novel Lyndon, Nadia Nabila Ibrahin

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

During the period 2005-2010, Klang Valley had experienced a dramatic run-up in housing prices. However, once the housing price deviates too much from its fundamental value, it may give rise to problems and even generates subprime crisis. This paper will discuss whether there are housing bubbles in selected Klang Valley areas based on different district by incorporating the examination of macro-economic indicators with micro measures, using a comprehensive set of indicators to test the bubbles. The analysis on housing bubble merely lingered around two specific residential property, they are double story type and condominium type. The study is done on five carefully selected district in Klang Valley using the Rational Expectation Model and FamaFrench Three Factor Model. Generally, the study focuses on the existence of housing bubble that stemmed directly from the housing price and the expected housing price in the study area. The study exhibited that the expected price creates very high positive bond towards the market price thus making it the main contributor to the increasing prices of sale and rental within the property market. The general finding of this paper strongly suggested that the existence of housing bubbles in Klang Valley residential property market is getting bigger and stronger.

Original languageEnglish
Pages (from-to)33-41
Number of pages9
JournalAdvances in Natural and Applied Sciences
Volume6
Issue number1
Publication statusPublished - Jan 2012

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Malaysia
bubbles
valleys
markets
economic indicators
macroeconomics
market prices
sales
Macros
Sales
Economics
testing

Keywords

  • Housing bubble
  • Housing prise
  • Macroeconomic indicators
  • Residential property
  • Subprime crisis

ASJC Scopus subject areas

  • Agricultural and Biological Sciences(all)
  • Biochemistry, Genetics and Molecular Biology(all)
  • Chemical Engineering(all)
  • Engineering(all)

Cite this

Housing bubbles assessment 2005-2010 : Experiences in Klang Valley, Malaysia. / Hussain, Mohd. Yusof; Rahman, Rahana Abdul; Husain, Fairuz Nabilla Mohamed; Lyndon, Novel; Ibrahin, Nadia Nabila.

In: Advances in Natural and Applied Sciences, Vol. 6, No. 1, 01.2012, p. 33-41.

Research output: Contribution to journalArticle

Hussain, Mohd. Yusof ; Rahman, Rahana Abdul ; Husain, Fairuz Nabilla Mohamed ; Lyndon, Novel ; Ibrahin, Nadia Nabila. / Housing bubbles assessment 2005-2010 : Experiences in Klang Valley, Malaysia. In: Advances in Natural and Applied Sciences. 2012 ; Vol. 6, No. 1. pp. 33-41.
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