Essay On Housing Demand

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Housing prices are determined by the relations of demand and supply, and it is likewise any other goods and services in the market economy (Hashim, 2010). The increased population will lead to the increase in housing demand (Mohd. Tawil, Hamzah, Khoiry, Che Ani, & Basri, 2011). High demand in housing and low people’s demand for owner-occupied housing is generally caused by not only the housing price, but also population growth, household formation rate and income growth (Flavin & Yamashita, 2002). Changes in the quantity of housing demanded will affect the housing supply, thus posing a direct impact on housing price.

Migration of people from rural to urban areas such as Klang Valley requires a lot of houses to accommodate the situation (Atasya et al., 2008). Based on supply and demand curve, there is a probability for house prices to drop to an affordable level because there are only few buyers who can afford to buy the house, and vice versa (Kementerian
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Unfortunately, due to the many laws, regulations and procedures related to the building of houses, the production of housing becomes slower (Tze San Ong, 2013). On the other hand, Vermeulen and Van Ommeran (2006) highlighted that “people will move to another area where houses are built, but houses are not necessarily built in the area where people would want to live”. This could probably be because of job transfers. Commonly, people would buy a house in a particular area because they work there or the rental fees are equal to their housing monthly instalments. In Malaysia, lacking of affordable options to own property has forced many Malaysians into the rental market and illegal settlements, which is drastically increasing due to population growth and urbanization. There are a lot of factors that affect housing prices but it is undeniable that one of the significant factors would be growing population (Tze San Ong,

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