Essay About Key Element Of The Housing Market And Critical Review

Housing Market Demand
INTRODUCTION        Housing market refers to the supply and demand for houses, usually in a particular country or region. A key element of the housing market is the average house prices and trend in house prices. In this assignment we will discuss about housing market in Malaysia. Basically, there are several factors that affect the housing market such as interest rate which influence cost of variable mortgages, state of mortgages industry, economic growth, incomes and unemployment rates and population and demographic trends.        Based on the topic that we have chosen, Khazanah Research have says that ‘housing market “severely unaffordable” . This article had tell that house price in Malaysia are more expensive than income which means people with median income are not afford to pay the median price of house , they also cannot buy or rent the house for low-cost income.        In part 1 of this project, we will summarize the topic that we have chosen together with additional article that we have found.  Furthermore,  critical review in part 2 will tell more about this topic  by relating with microeconomic with demand and supply, consumer behaviour and cost theory, and others related themes.SUMMARY MAIN ARTICLE        From the article, it can be concluded that despite the hiking price of houses, the demand of housing properties in Malaysia keep increasing time to time. This is because of the urbanization and the improving lifestyle of the people. But the problem that had been arising now is regarding price of houses in Malaysia that is viewed as severely unaffordable. The fact that the current price of median house is 4.4 times of the median household income are very worrying. It is not the case because of high land and construction makes the housing price high, but it is because developers are willing to pay for increased land prices as the market price for housing increase that ultimately causes housing prices to increases. Even the construction cost had been falling, but still there is no drop in housing price. And the consequences above this matter, the low and middle income households suffered to own a house. Fortunately, for the low income household there’s a policy initiatives relating to housing affordability had been through transferring physical or financial resources. On the other hand, the medium income household neither don’t deserve for social housing nor able to afford the private sector-supplied houses. Therefore, government should change the policy in order to enhance the elasticity of housing supply and in the same time make it more adapted to all the need of all sections of the population. If the problem is not addressed, there will be more and more population in the future that will require social housing because of their incapability to own a private house since the price of houses will keep rising but not align with the household income of Malaysians.