Sustainable house price entail equilibrium housing myths and realities

Abstract

Residential property market in Malaysia has experience massive price expansion over the past few years with house prices, at several localities, expanded at the rate of 15% per year. As economic theories depicted, house price movements is inherent with the regional economies and regional demographics. However, during an economic downturn, localities with the highest price increase will be facing the most severe price decline. Under what ever circumstances, the needs for housing as a shelter still persist as the basic necessity. This paper intent to analyses house price movements as to several economic variables such as consumption, investment options, interest rate, price sustainability and affordability and wealth creation as to ownership. From these analysis, it is expected to address the issues of sustainable housing in terms of affordability and equilibrium housing. As these issues are pertinent in ensuring equitable living and minimize the incidence of housing-market failure due to lack of conservative and restoration measures in attaining long term sustainable living. Discussion will also focus on the effects of global business cycles and economic environment as to house price movement among several industrialized nations and several non-industrialized nations. These issues are essential aspect towards achieving sustainable living environment for the current society without compromising the opportunities of the future generations. Choice as an owner or renter would very much depend on the sustainable price level.